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Eek! Avg say i have a trojan - what should i do pls?

Hello
I have just seen that AVG scan says I am infected as follows

Detection Name : Trojan Horse Java Agent X
Object Name: C:|Users|Documents|*PC|Backupset2008-07-16 (etc)
Object Type : File
SDK Type : Core
Result : Infected

I see there is a button on AVG scan that says I can remove these infections - I presume in one fell swoop. I also presume it is perfectly okay for me to do this? But wonder why AVG didn't just heal this themselves?

I'd be very grateful for any wisdom you clever boffins can offer as I am not very techie-minded. Am mega worried.

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