I was recently having a small problem with AVG Antivirus 8 Free. The problem was that the Update Manager said that the update was successful, but then “The update needs restart”.
However, the problem was that even if I did restart, the thing would just stay there, saying “The update needs restart”. The biggest issue was that the Virus Definitions were not being updated.
I tried adjusting the settings for Update and other stuff, none worked. However, the solution to this problem is quite easy. So follow these lines if you are having the same problem. Tested with AVG8, since it’s only with it that I got the problem.
First, go to AVG and do “Update Now”. The update will seem to complete, but will say “The Update needs restart” as usual.
Now, head to your install directory, which for most of you will be: “C:/Program Files/AVG/AVG8″.
In this directory, you will find a file named “updatecomps.cfg”. What you need to do is to either delete this file (kind of unsafe, untested) or just rename it to something like “updatecomps.cfg_old” or “updatecomps.old” like I did.
Update: Sidjsns says that the “updatecomps.cfg” file is not found under a “server” subdirectory. Thanks!
After that, go back to AVG and do another Update Now. The Update should proceed normally, and it will ask you for another restart. After that restart, things should be ok. Your Virus Definitions and other stuff will be up to date.
I tested the above and it worked for me. I forgot exactly where I got the solution, but I think it must be some forum. Credits to the person who found how to solve this. Hope this helps. 
