Terraria's 1 month anniversary:

-By The Numbers- As of (06/16/2011)

Copies/4Packs Sold Total - 350,000+ (Copies Owned - 432,000+)
Days/Top Ten Sales List on Steam - 32 days
Days/Top Ten Played List on Steam - 32 days
Players Online at once - Peaks we have seen range from 14k to 32k a day.
Facebook Likes - 28,773
TerrariaOnline Members -40,992
YouTube Trailer Views - (Old-Gameplay) 1,181,691, (Release Trailer) 866,285

Pretty impressive for a game that started development only 6 months ago!

They also announced that in the next update there will be an optional hardcore mode, wherein character death is permanent. Watch your step while spelunking!

Are you using the .NET installer that comes with Terraria or the official one from Microsoft? Or have you tried both?

Shades it sounds like something is using a .net4 file when you are trying to update and it is locked. Try making sure you exit all applications (including anything in the system tray) and disable any AV.

Also try downloading the installer form MS and doing it manually - sometimes the Windows Update version gets damaged and if it is a cached version it will never work!

If that doesn't work try running MSCONFIG and disable all Startup items and all non-MS services so that you get as near to a clean Windows startup environment as possible. Note some security software doesn't like you doing this so it may be best to leave any such software allowed to run and disable it before trying to install again.

Terraria comes with a webinstaller so I downloaded the installer from Microsoft and used that as my PC is not (or will be) connected to the internet anymore. That installer worked great on several PC's but not on mine. Because it is not connected to any network I didn't see the direct need for security software, so I uninstalled Avira and disabled the firewall. Actually, that PC is quite devoid of sofware/service as I use more and more portable apps these days.

All that didn't help, so I thought that there is some security setting in place that doesn't allow access to the folder .Net4 wants to install into.
The log file from the .Net4 installer shows one error:
Launching CreateProcess with command line = wusa.exe "D:\d4ab5f75b780171ea7f2662625\Windows6.1-KB958488-v6001-x64.msu" /quiet /norestart
Exe (D:\d4ab5f75b780171ea7f2662625\Windows6.1-KB958488-v6001-x64.msu) failed with 0x5 - Access is denied.

I am able to access and extract the .msu file mentioned above. to Granting read/write capability to everyone in the folder from the wusa.exe command didn't help. Copying the extracted data from the installer to another (also fully shared) folder and executing the command in the console returns the same 'Access is denied' result.

The above I tried with the Administrator account and the account that belongs to the Administrators group.

It appears to me that the command 'wusa.exe' is not sufficiently elevated to install .Net4.

Ah well, at least this is becoming an interesting puzzle to solve...

Re-installing becomes quickly the only option that is left, I am afraid. 

Tried to give the application wusa.exe unrestricted access using the security policy editor (secpol.msc), then tried SubInACL to fix the likely broken ACL's. As this got me nowhere I read more from the link above and saw in one of the comments that it is not working on 64-bit systems. But there is a suggestion to use CACL to try to elevate that app, but each time the result is the same: "access is denied".

Even the last ditch attempt to install: copying the wusa.exe executable and every other file showing up in DependencyWalker into the extraction folder and re-execute the command-line mentioned in an earlier post, proved to be fruitless.

Re-installing becomes quickly the only option that is left, I am afraid. 

Tried to give the application wusa.exe unrestricted access using the security policy editor (secpol.msc), then tried SubInACL to fix the likely broken ACL's. As this got me nowhere I read more from the link above and saw in one of the comments that it is not working on 64-bit systems. But there is a suggestion to use CACL to try to elevate that app, but each time the result is the same: "access is denied".

Even the last ditch attempt to install: copying the wusa.exe executable and every other file showing up in DependencyWalker into the extraction folder and re-execute the command-line mentioned in an earlier post, proved to be fruitless.

There is a procedure for completely removing Windows Update and WIndows Installer in Windows 7 and reinstalling then from clean. I used them last week and found the details on MS Technet - sorry I didn't keep the link.

And it's 50% off again today (August 10th).

Not just today, but until Thursday at 4 PM Pacific.

This also means you can grab a 4-pack for just $5 more than the regular price of one!

I'd be up for grabbing a bundle if anyone else is fresh

I'll join in on the bundle. Oops the sale is over. I thought it was the weekend deal. That's especially embarrassing since I'm the one who posted about the sale and even posted the date it ended.