Hi Advanced Installer Developers,
the .NET 4 Framework is intentionally not backwards compatible with older framework versions. That means, if you compile your application for version 3.5 SP 1 or lower, this can cause problems on Windows XP and Windows Server 2003 machines, which do not include a CLR Version 2.0 by default (like Vista and Windows 7 do).
Now when you choose .NET Framework SP1 as a prerequiste, you automatically look up the registry keys for .NET 4.0 also, that seems to be your default setting. So if only .NET 4.0 is installed, it won't install your prerequisite .NET framework and your application won't run. You have to remove the lookup values for .NET 4.0 that are inserted by default manually to resolve this problem - but they really should not be default values at all.