<Correction of my message above:>
Trying to run Wubi on an XP virtual machine and on a Win 7 Beta virtualbox machine, it seems to run fine, no error messages noticed (I didn't complete the installation because of lack of disk space in my virtual machine) and AVG free 8.0 is installed in both of them. So the problem, in my case, is not directly connected with AVG, or at least it seems not to be.
<Correction of my message above:>
Trying to run Wubi on an XP virtual machine and on a Win 7 Beta virtualbox machine, it seems to run fine, no error messages noticed (I didn't complete the installation because of lack of disk space in my virtual machine) and AVG free 8.0 is installed in both of them. So the problem, in my case, is not directly connected with AVG, or at least it seems not to be.