Which one is wrong Avast or ZoneAlarm

Zone Alarm obviously is spyware because it collects user information and sends it to zone labs.

basically many software do example windows media player installer, IE installer and windows xp itself without your knowledge.

None of it is a spyware. And ZA collects user information only with your approval when you install it. See, this is simple - ZA has an antispyware, and it needs to update the definitions. Those definitions contain the "signature" of the spyware for detection. Avast looks for signatures too in files, and when it finds them, it thinks its a spyware. Thats it. WMP, IE and XP do it, thats different.

waste of resource

Its a false positive

^^ Ah yes thats the word you're looking for. Thanks anandk!

Notice the location of the file. I guess this is what was happening.
ZA downloaded the update containing virus patterns, was unpacking them and preparing for installation when Avast detected them and suspected the presense of a virus(as the file contained virus patterns).