You have a very old version of the launcher. However, this looks like an antivirus problem anyway. Update the launcher, make sure you have 64-bit Java, and try again. Then post a launcher log if it's still not working.
AVG is bad about this. It's not just the .techniclauncher folder, it's also Java, etc. I'd just kill it while you're trying to install, and preferably make that death permanent and get a different AV.
You're using 32-bit Java. It'll let you use 1.5GB max. You need to post a log, check the bit version of Win7 you have, make sure Java matches it, and then add whatever other information you might think is useful.
You know, I've never heard this comparison, but it is kind of apt for most peoples' general use of the software. I'm sure it works well for some, but...
Quietly. With no fanfare. You won't even know it's gone until you go looking for it.
Edit: If you have reached the Mojang screen, the launcher has done its work. If you get to that point, then post a bug report here, I will delete it. See above.
It looks like you might be trying to use 64-bit Java on a 32-bit system or vice versa. Please post actual version numbers. Also, we need a launcher log, not a Java log, to troubleshoot.
Failure to clear the cache means you either need to kill all instances of Java in task manager, or you need to reboot and not run anything from the launcher until you clear it.
1) Highly recommend you use Java 7. Install it, and remove Java 6.
2) Go into Video Settings and increase your render distance. It's probably set to zero.