AVG wants to install update for driver on my printer

Rod, that depends on the situation. First you need to keep few things in new mind. It is always recommended to update drivers as it fixes several bugs. But driver update sometimes fail. 
Next you should consider other matters like whether the tech person was a local technician or authorized technician from HP. If not from HP then contact HP who can provide much better solution.
Third, it is always better to create a system restore point before you make any changes to your PC so that you can always revert back to good working state. Hope this clarifies your doubts. Thanks.

We have never been able to scan with our printer, an HP 8500, so I had a tech come and he installed a driver from HP and the printer was able to scan, however we had to hook it up direct to the printer to make it work, which is all right by me. Then AVG found a driver update. The tech told not to do it as it was working and just leave as is. What so I do?

Rod, that depends on the situation. First you need to keep few things in new mind. It is always recommended to update drivers as it fixes several bugs. But driver update sometimes fail. 
Next you should consider other matters like whether the tech person was a local technician or authorized technician from HP. If not from HP then contact HP who can provide much better solution.
Third, it is always better to create a system restore point before you make any changes to your PC so that you can always revert back to good working state. Hope this clarifies your doubts. Thanks.