if (this.hitTestObject(_root.enemy)) { ...........; }
It might be trying to test for collission with a movieclip named enemy within the bullet movieclip, when in fact you want to test for collission with a movieclip that is placed on the main timeline. Im not sure why it gives you an Implicit Coertion error though, perhaps there is an error within the code placed inside your hitTest.
sorry didnt realise your working on AS3, I think its better if you test for collisions in the document class or a class that commands both the enemy and the avatar. Make an array to hold the enemies and another array to hold the bullets.
On the constructor function, you would create the arrays to hold them, and within the function that checks their collosion you would use 'for each()' to test all the movieClips within your arrays. I wish I could elaborate but I havent studied AS3 classes much. You could read this as it explains collision testing for multiple MovieClips.