Hmm, I thought the blue ports were USB 2 and the non-blue ones were USB 1 or 3, but it sounds like I had that backwards! So maybe that's all it took: connecting to a non-blue (USB 2) instead of blue (USB 3) port. Regardless, I listened all day yesterday (10+ hours) on a non-blue port, and didn't have a single drop-out!
As for anti-virus, I know AVG gets rough reviews at times, but so do all anti-virus programs. Well, at least the free ones. And the last time I paid for AV was Norton, and that was a LOT more intrusive and buggy than AVG. Windows Defender is indeed pretty limited on Windows 7.