Wow this has been active! I missed that you responded so I am so sorry for the very long delay. I redownloaded the current version to see if there is a difference but there isn't. I don't get anything at all. No error, no application. It is like it never starts running. I am guessing that options 2 & 3 would be ruled out by that. As for option 1, I won't say it is fully installed correctly (though I believe it is), but I do have .Net 1.1, 2.0 (w/ SP1), and 3.0 (w/ SP1) installed. I will try reinstalling .Net 2.0, but I am not holding much hope in that being the problem.
EDIT: Nope, verified that it didn't change a thing. I don't get it.