Then I would say the AVG findings are a false postive. AVG is just not a very good anti-virus program. When researching your problem I found no other av program that found this file. I would advise you use a different anti-virus program, it certainly is one that I never recommend.
It rarely ranks among the highest or most reputable. My advice would be use [B][URL="http://www.filehippo.com/download_antivir/"]Avira Free 2012[/URL][/B] or [B][URL="http://www.filehippo.com/download_avast_antivirus/"]Avast Free[/URL][/B], but not AVG.
Your System restore is set way to large. You have restore points going back over six months. System Restore should never be used to go back that far, if it is used at all and then it should be only for a very few things.
Your Java is way out of date, you are running version 6 Update 25 and the most recent update is version 6 update 30.
Uninstall All Java listed in add/remove and then go here to download the latest version. [url]http://www.java.com/en/download/manual.jsp[/url]