I recently came across a machine where .NET Framework 3.5 wasn’t functioning correctly.  It was needed as a prerequisite and the application was not recognizing it even though it was enabled in the “Turn Windows Features on and off” (Search for this on the Windows Start Menu).

If uninstalling and installing .NET on Vista does not work you can run a command to scan and repair system files.  Since .NET 3.5 is part of Windows 7 you can’t easily uninstall it.  Try this command out and it should help if you actually have corrupt system files.

1. Open a command prompt (CMD) window and make sure you ‘Run As Administrator’. (Search for CMD in your Windows 7 Start Menu and then right click CMD.EXE and select ‘Run As Administrator’).
2. Enter the following command and press enter:  sfc /scannow

This can take a while but let it run.  This will scan all protected system files and replace incorrect versions with correct Microsoft versions.  Once it has completed reboot your machine and try again.

If any errors are reported that SFC was unable to fix, there are steps in this knowledge base article  that explain how to locate and attempt to fix the errors