Question, does your dad fix computers for everyone around? If so then why are you asking for help here? I am the go to person when it comes to fixing computers in my circle. I have cleaned thousands of viruses, a few worms, and even had to fix corrupted paths (college days, meh). I know what I am talking about when I say that AVG sucks. Most of my friends at college used AVG and would get infected with viruses all the time. I would come and have to clean them. Some would be automatic using better software, and combofix when I needed to clear out a rootkit. Some would be more devious and I have spent up to 48 hours straight manually cleaning viruses from people's systems. You may trust your dad, but more than likely he has a lay-understanding of viruses. He probably does not actually know what a worm is.
The definition of a worm is a program that self replicates to infect other computers. It will spread usually across a LAN, and then into another network when an external connection has been established. A worm differs from a virus in that it does not need to actually attach to any other program. It is this specific feature that tells me that you dad does not know what he is talking about with it being a worm. If it were a worm it would not bother with the replication of a directory. Neither would the replication of said directory actually cause a crash of a system. It would cause a headache when one tries to delete said directory.
Now I never said that it was a program keeping the folder locked. I stated that as one of the reasons they stay locked. Now even if it were a virus, you most likely would never see it in the task manager as most modern viruses run in such a way as to not show up on there. If a virus is embedded in a dll file (dynamic link library) then one would never see it in the task manager, and AVG really struggles to clean, or even detect those types of viruses. You say that it is our opinion that AVG is bad. Well, we are using an informed and educated basis for which me make such opinions. When the lsass virus hit OSU back in 2007 AVG did little to protect against it. That one was a pain to deal with because it was so wide spread. I ended up cleaning over 100 computers in one week when that happened.
Tips, next time you seek advice, either go to your dad, or ask someone else. Either way, listen to the advice given and try it. You might just learn something. Asking for tech support over the internet means you are seeking a favor from a stranger. That stranger has taken time out of his/her day to try and assist. The very least you can do is listen, and try the advice. If you go in with the notion that you know what is wrong, even when you might very well be wrong, the likely hood of wasting the time of those trying to help is quite high.
Lets look at it from an empirical stand point. You can assume you know it is a virus, but then again you can also assume you can walk on air. Just because you assume something does not make it true. So if you were to test, by means of taking the advice above, you may or may not have found that it was a virus. Just as if you were to test if you can walk on air you may or may not break your ankle in the attempt.
Now what the above poster said is true. Most tech support you call over the phone have a database that they search. They will tell you to follow specific steps, even when those steps are most likely wrong. This is because they really do not know what they are talking about. They think if it is yellow and frozen it must be a lemon snow cone. It does not matter that it smells bad. I have had many an argument with my ISP tech support, because they would insist their systems were fine, and the issue must be at my place. Every time it turns out that I was calling and letting them know of the crash as it was happening, and they do not like to listen to such information most of the time, because it deviates from their steps they have been told to never stray from.
Another question. If you needed major surgery, and your dad said he could do it better than the surgeon, would you trust him on that also?