What version of zone alarm are you using, the free, or pro version, I don't think the free version has the PRIVACY SETTING feature do you know if it does or doesn't, if it doesn't you would select NO.

I use both Avast and the free Zone Alarm and have never had a problem. I vaguely recall seeing the warning that you posted, but I just ignored it and have had no problems in three years of using the two together.

I run zone alarm pro and had this isssue also, it is a true issue for those running pro but not for those running the free versions, however some times people get the trial version rather than the actual free version and in that case it can read the pro version parts that are in that trial version.

Here is some info that should help you
What is Web Shield and how does it work?

A:

Starting from the version 4.6. avast! comes with a new on-access scanning provider - Web Shield. It is able to monitor and filter all HTTP traffic coming from the Web sites on the Internet. ItÂs implemented as a HTTP proxy running on your PC. Connections from your Web browser are redirected to the Web Shield module. Web Shield in turn connects to the requested web server and while downloading the content it scans it for viruses and Trojans. Only the clean data is delivered to the browser, every malware is stopped before it gets saved on your PC.

If you are using ZoneAlarm Free you should click NO, because privacy features are not present in ZoneAlarm Free this will not turn off webshield transparent mode proxy.

If you are using ZoneAlarm Pro and Privacy Control in ZoneAlarm is set to High and if you click YES in avast comptability dialog box the transparent mode proxy in webshield will be turned off you have to manually configure browser to access internet. To manually configure your browser watch instructional video

to tell if yours is running go to the A button for Avast in your bottom tray and right click on it, select the top option, when that box opens slide down to the bottom option which is web shield select it, then look over to the right it should say how many it has scanned and last scan info, are you seeing numbers there are is is at zero? if it is at zero then you will need to configure your browsers, I had to do it for IE and firefox but it is super easy to do. If you see it counting and it shows numbers you are fine.

this link takes you to the directions, pay attention to which one you should use because one is for broadband and one is for dial up
How do I manually configure the WebShield HTTP proxy
Also there is the link to click on for the video on how to make the settings for firefox.
this is the link to the firefox settings video
http://www.avast.com/files/tutorials/ws_ffproxy.htm

for discussions on this here is the avast forum page for one of these discussions and there are many of them there.

Here is a link that might be useful: avast forums

I use Avast on one computer and clicked to allow them to proceed with seemingly no ill effects

the true measure of if that aspect of the web shield is scanning can be determined by looking at the web shield history to see if it is actually showing numbers there of how many items have been scanned. I know when I first set mine up I thought all was fine since I had no issues but when I did go to the web shield area it was showing zero scans which let me know No it was not so I did the reconfig on my browsers and immediately started seeing the numbers show up letting me know it was in fact now scanning everything through the browsers, which was quite a relief.
Had I not read up and gone to check to see if it was showing scanning items I would have thought all was fine.

Each of the options can be checked in that area also
right click on A in tray for Avast select top item ON Access protection control, there you can click on each item on the left and will see the results on the right pane, web shield is the bottom item.

Hi Everyone Thanks for your replies. I went to my sisterÂs in Ohio right after I posted my question and just returned home. IÂm using ZA free.

Raven, when I went to the web shield area, it shows no scanned count!!! Thanks for pointing that out to me.

Funny thing, I removed AVG from my sisterÂs laptop and installed Avast without getting that screen on her computer! I have ZA free on her pc, also. We both run XP home ed.

What should I do now??? Uninstall Avast, reinstall and click No when shown that screen??? I really appreciate the wisdom and knowledge each of you tirelessly share on this forum.

you can just follow the directions for setting your browsers it is super easy just a couple of simple changes you do to each browser, there is even a little video on how to do the firefox one. Takes just a few seconds.
I put the links there in my post above.

Thanks, all. Problem appears to be solved now.