Solution from AVG:

• Open the AVG user interface (i.e. double-click on the icon in your system tray).
• Click on the ‘Tools’ menu, then click on ‘Advanced settings’.
• Click on the ‘Manage’ tab at the bottom of the list, then click ‘Revert virus database to previous version’. This should solve the issue and allow you to open iTunes.
• If you have moved the ‘infected’ files to the virus vault, you will need to restore them before iTunes will run. If you have deleted them from the vault, you will need to reinstall iTunes.

Turns out AVG’s newest update is causing some issues with iTunes. As users on Apple’s support forum have deduced, the threat that AVG is detecting in a number of iTunes’ files is almost certainly a false positive. The specific files that AVG is indicating are infected for me are:

• iTunesLocalized.dll
• iTunes.dll
• iTunesRegistry.dll

Several posters have indicated that AVG detects over 200 infected files upon trying to reinstall iTunes with the latest version.

One user has suggested adding certain directories to AVG’s exception list to prevent it detecting the false positives and disabling iTunes, but I would suggest not doing this unless you plan to undo it when AVG release a new update that fixes this problem, as otherwise it could leave iTunes open to attack by a legitimate virus.

Another user has indicated that after contacting AVG Technical Support, they are aware of the issue and intend to fix it in the next definitions update. With this in mind, probably the path of least resistance is to refrain from using iTunes until the next AVG update is released. With such a large number of people affected, I can’t imagine it will be long in coming.

p.s. While some users are suggesting simply uninstalling AVG as a hassle-free solution, this could lead to greater problems as real trojans will find it exponentially easier to make their way onto your computer.