I don’t know what’s wrong with my XP system (besides the fact that I’m still using it) but I couldn’t install .NET 3.5 without removing .NET 2.0 and now I couldn’t install apply SP1 without removing .NET 3.0 and 3.5.
Fortunately, I was rescued by Aaron Stebner’s .NET Framework cleanup Tool – both times.
Kudos Aaron!