This windows defender, does it function in harmony ...

Windows Defender is suppose to protect you from spywares (not viruses - thought the line between them is starting to get very thin).

AVG has two products, one is an Anti Virus and the other is an Anti Spyware product (similar to Windows Defender) and a product called Anti-Malware which combines both Anti Spyware and Anti Virus.

If you only have the Anti Virus it shouldn't have any problems with the Windows Defender.

If you have the Anti Malware or the Anti Spyware product of Grisoft (the maker of the AVG product line) they might get into each other's way, though I know of a couple of friends that have them both installed without a problem so far. 

I have Norton Internet Security. does Windows Defender conflict with Norton Internet Security?

As far as I know Norton Internet Security does have the ability to detect and remove spywares, like Windows Defender does.

I'm not aware of any conflicts they might have, but in most cases when you have 2 active anti-spyware programs (they both actively tries to find spyware while you work) they might detect the same spyware and might conflict.

In this case I would recommend using only one active spyware detection and schedule a complete scan on each product (not at the same time, of course) every day or week (depending on how paranoid you are about spywares )