Early reports and veiled threats of doom and destruction for XP users have so far failed to materialise and may never. AVG is a good AV but so is MSE and it's still being updated in XP systems.
Therefore, my take on this is turn off automatic updates in Control Panel and uninstall AVG. MSE will still be updated and a valuable tool because no-one fixes Microsoft security holes quite like Microsoft. MSE will always be free whereas AVG will always nag you to buy the latest version.
It's easy for posters to suggest "upgrade to Windows *" but the reality for a lot of folks is that the money simply isn't there. XP will continue to be a workable system as well as the system of choice for many users, including businesses.
Linux remains free, of course, and makes a secure home for XP to run in a Virtual machine.