The steps to resolve are posted in the last comment of a posting in the .NET Framework Developer Center found here:
Windows 7 & NET framework 3.5
[Paraphrased]
"In Windows 7, Vista, and Server 2008: The .NET framework is built-in, so to repair it, follow these steps:
1. Click your Windows button.
2. Type CMD, and then right click on the Command Prompt that shows up, and select '
Run as Administrator'.
3. At the DOS Prompt, type '
sfc /scannow' and press Enter
4. It may at some point ask you for your original installation files, which you will need to get off of the original Windows Installation source.
5. You are done, this will have repaired any .NET framework problems up to 3.5, which is built-in to these systems, as...