Are you talking about AVG Free or their paid software?
Im assuming that you are talking about AVG free one.
Maximum PC gives it 6 out of 10. It has no IM scanning, no Rootkit protection (major flaw) no firewall (biggest flaw possible) no identity protection, no spam controls, and no parental controls. And its a fairly big resource hog.
It can do basic virus scanning and removal, but its limited at that.
I haven't noticed any severe resource hogging issues compared to any other virus scanner I've tried, but then I'm running a decently powerful system.
It all depends on what you're looking to get out of it. It's definitely NOT an all-in-one security solution: as you say, it basically only does one thing, and that's scanning, removing, and providing realtime protection from viruses and malware.
Combine it with a good adware scanner (any number of free options), firewall (Zonealarm has a good free version, there are plenty of other options here too), and some common sense, and you'll be pretty well covered security-wise. It's a little more effort to assemble the bits and pieces of your security that way and deal with potential compatibility issues as they come up rather than just buy a package deal that comes with everything you need, but then, package deals tend to cost money. Oftentimes "free" can be worth a little extra effort. Also any given security suite will always have that one weak link that's not quite as good as the current leader in that area.
IM scanning? Don't accept files from anyone you don't trust. Rootkit protection? Get it from your adware scanner, or download a standalone rootkit scanner. Identity protection? Use common sense: I've never known a piece of software that could stop a truly stupid person from doing something truly stupid anyway. Spam controls? Your email client should have this built-in, and everyone nowadays uses webmail anyway. Parental controls? Not a selling point unless you're a parent, and no substitute for, y'know, PARENTING in any case.
For the record, CNET gives AVG Free 5 of 5 stars, with an average user rating of 4 stars. Maximum PC tends to review from the point of view of the hardcore enthusiast, which is fine, since that's their audience, but it's useful to get other opinions, too. It's also very useful to check the date of any reviews, since stuff like virus scanners are updated (and hence, can change) very quickly: CNET's is only relatively recent (Nov. 9 2008). Most reputable sources update their security reviews / recommendations at least once a year, so I wouldn't be surprised to see CNET revisit it in the next couple months.