For what it is worth, I found the following stock reply from Grisoft's forums about the server/update problem:
"The new long awaited program update v8.0.169 was just released... See [freeforum.avg.com] so the update servers are probably going to be overloaded until most of the users finally get updated to this version! Just please be patient and all will soon calm down."
http://freeforum.avg.com/read.php?12,145804,backpage=5,sv=
*****
The program update includes:
Program update AVG Free 8.0 169
Improvements
Added new contacts
Improved parsing of Google advertising URLs
Implemented detection of newer version of Opera cookie
Implemented AVG Toolbar compatibility with Firefox 3.0.1.
Added new format of email certification
Improvements in GUI
Fixed Bugs
Fixed crash during the update process
Fixed problems with detection of some external USB DVD/CD drives
Fixed problem with inactive components after update
Fixed problem with switching to small font size in Microsoft Internet Explorer after closing AVG User Interface
Fixed repetitive backup of scanned files by Vista incremental backup service
Fixed problem with link scanning if tag is presented on a web page
Fixed problem with Whole Computer Scan on systems with damaged or not initialized partitions
Fixed problem with crashes during the infected archive scanning
Fixed problem with security vulnerability (reported by Sergio Alvarez) that could cause the scanning engine crash on specific samples
Fixed problem with crash on some corrupted NSIS archives
Fixed problem with MSN authentication
Fixed possible crash of MS Outlook 2003 if AVG license has expired
Fixed missing outgoing certification for emails with attachments if Personal E-mail Scanner is used
Fixed problems with Alert Manager crashes
Fixed problem with Microsoft Office slow-down if Microsoft Office plugin is used
Cheers,
John