Same happened with AVG 6 last year, when lots of people took it up. The free version downloads updates from free.grisoft.com (or something very similar) whilst the Paid version downloads updates from
www.grisoft.com.
There was a well publicised change to an .INI file for AVG 6 Free Edition which repointed it to download from
www.grisoft.com - I think that free.grisoft.com simply gets overloaded wit download requests at peak times.
In AVG 7 the .INI files are gone and I know of no such change to repoint the download URL.
As Coconutty said, it works fine if you allow background downloads and leave it to it's own devices, and it's free!!!
RC