And to DonationCoder.com and Circle Dock's little corner
This is one (or more) of a few things:
.NET framework is not installed, or corrupted.
You have stated that .NET Framework 2.0 is installed. I would suggest looking for updates, or uninstalling and re-installing the .NET Framework
There are a few steps I can provide to help you through this if you want to tackle the situation.
Symantec Antivirus conflict....Ick
If you are using Symantec Anti-virus software. There is a possibility that it is creating a stop gap against the Circle Dock program.....
If you are using Symantec AV....Turn it off for a few moments and then try to run Circle Dock...If Circle Dock runs, you will need to put and exception in to the AV for CircleDock.exe and related files.
A Driver Conflict
I can not see this as the cause.
This is the most common Culprit, and the WORM_KLEZ.E virus in Particular.
In this case run a thorough Virus Scan with a good AV software.
There is a slim possibility that you have too many bad or conflicting registry entries, but this is rare.
I can make a couple of suggestion to clean your registry if you wish, but I would not take responsibility for the results...So I will not pass this information on unless you request it.
There is also the slim possibility that a key part of Circle Dock, or require system software is missing to run Circle Dock....but this is an extensive list, and I wouldn't want to try and track a simple missing piece.....
My feeling is that ultimately it will come back to the .NET framework, as the 2.0 framework was and is easily corruptible.
But this is my current guess based on the error shown