Also I notice on the AVG site they have a recent update.
"Update AVG 7.0 - AVI 260.0.0 and AVG 6.0 - 517
Added detection of new variants of IRC/BackDoor.Flood, Worm/Spybot, a couple of backdoors and some program fixes in AVG 6.0.
- September 8, 2003 -"
Have you checked this out?
Sorry, I have no idea how to remove it manually.