AVIRA serious problem!!! Detecting legit files as Malware!!

Avira has sent out a defective antivirus update that is causing paid versions of its product to block critical Windows processes and third-party software, effectively rendering millions of PCs unusable.
German security company Avira is experiencing serious technical difficulties. A defective antivirus update that has been downloaded millions of times is bringing Windows XP, Windows Vista, and Windows 7 computers to a screeching halt across the world, according to user reports (1, 2).
The update bumps the software version to 8.2.10.64 and the definitions file to 7.11.30.24. The result is that the AntiVirProActiv component starts detecting critical processes as malware, including the following:
\windows\system32\dllhost.exe
\windows\system32\explorer.exe
\windows\system32\iexplorer.exe
\windows\system32\notepad.exe
\windows\system32\regedit.exe
\windows\system32\rundll32.exe
\windows\system32\taskeng.exe
\windows\system32\wuauclt.exe

Original Info
Its in german. translated Page......
http://translate.google.com/translate?sl=auto&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&u=http%3A%2F%2Fforum.avira.com%2Fwbb%2Findex.php%3Fpage%3DThread%26threadID%3D144883%26pageNo%3D1&act=url

 

http://www.avira.com/en/proactiv-application-blocking
Avira free is excluded and problem is solved
http://www.zdnet.com/blog/security/avira-antivirus-update-cripples-millions-of-windows-pcs/12129

 

How does Avira free was excluded
And only effected the paid versions??

 

Free version doesn't have component called "ProActiv", which in this caused the problem.