In Japan, Korea and China this word refers to any kind of adult video, including animated(which is not called hentai here in Japan).
AV means "adult video", but it does not stand for "adult video".
It just has that popular name.
AV has some distinct characteristics from any other porn. Anything you see in cartoon porn(known as hentai in the US) other than little girls and the physically impossible, is done in AV.
AV stars are known as AV Idols.
They are girls who start with innocent-type roles(ie schoolgirl is very popular here). Most of them get moved onto more hardcore things(ie S&M also popular here but only under the surface).
I have been in Japan for 2 months and bought some AV, which is how I know what I am saying.
Japanese porno films
Harry: "Sorry, not happening. Cleveland steamer comin' right up!"
Lloyd: "Hey man, have you seen 'Av' yet?"
Harry: "What the hell is 'Av'? 'Avenue Q'? Avril Lavigne? 'Alien vs. Predator'?"
Lloyd: "No, 'Avatar' obviously."
Harry: "Sorry dude, as an officer of the grammar police I'm going to have to cite you on that illegal abbreviation. You can pay me the $100 fine anytime."
Lloyd: "What? I don't owe you..."
Harry: (pulls out gun) "Break yo self, fool!"