There is something in your project that is expecting some kind of configuration change to the .Net framework. If I were you, I would spend as much time as it takes trying to figure out what it is. Try disabling or removing from project or commenting out or something, until the problem goes away. Only at that time can you figure out exactly what to do about it.
The .NET Framework 1.1 has a different common language runtime (mscorlib), so using its configuration to configure .Net 2.0 seems dangerous to me, as does configuring .Net 2.0 without knowing why you have to.
I don't understand why you ask "what page" to put the code in. How can someone who doesn't know what your application does or how it runs tell you that?
You don't have to install the .Net 2.0 framework on the computers. Like I said before, if you have .Net 3.5, you have all of them. You might consider installing SP-1 for .Net 3.5 and see if that makes any difference.
RobinDotNet
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