I've had similar issues with Avira, a different free antivirus. AVG works fine for me both under XP and Win7.

The entire setup of computer and software seems to matter a lot. A fresh install isn't sooo big of a job and I recommend it if in doubt about the performance of a computer. Then try your preferred antivirus. If you've found yours, just fine! I agree 29 bucks isn't too much for security.