Well, I hate to be the bearer of bad news. I just installed Vista x64 and AVG Free Anti-virus 9.0. I then uninstalled the AVG anti-virus as you said you did. I did an in-place upgrade from Vista to Windows 7 and had no problems or hangs durings the install. In my setupact.log file I have no reference to the avdapi32.dll file that seems to be giving you problems. I can only assume it is some other program you installed.
The AVG free anti-virus you said was challenged by the compatibility checker was not challenged by mine, but I was using version 9.0 , which is supposedly fully Windows 7 compatible.
It bothers me you say the Free version of AVG was not compatible, which would indicate to me you were using an earlier version and should have updated to the latest. You also say your virus scans do not complete, so maybe the update will allow you to track down any problems. Hopefully the earlier version did not leave reminents on your system, but check msconfig.exe to make sure something is not left of the earlier version, especially in the startup tab, prior to installing the newest.
My final suggestion, and believe me, I have no more
, is that you install the 9.0 version of the AVG free anti-virus and do a virus scan. If it does not complete, then that is most likely your problem, and I now know you can tell exactly where it stops. After taking care of whatever is causing the anti-virus scans to stop, then try to install again. I am sorry I could not help you find your problem.