I think people OUGHT to know the difference between viruses and other kinds of malware. How many questions have we gotten here that go like "I must have a virus because suddenly x, y and z started happening"?
But wouldn't AV software mainly protect against viruses anyway? Isn't most malware successful when the user enables it to be somehow? I mean, no AV software can protect against a user clicking on an inappropriate website. A self-replicating and spreading virus is different and handled differently from user-installed malware; even more of reason to make the distinction. And it would probably be just as misleading to say that AV software will protect against all forms of malware.