It seems there are a number of readers struggling with the MS07-040 patch for the .NET framework on what appears to be mostly clients.

The reports we got so far seem not to lead to any specific thing that happens in many cases, just various things going haywire. We really do appreciate the heads-up warnings we get from our readers as it allows to write little warnings like this one.

We'd like to offer a double advise at this time:

• If you run into trouble do call Microsoft and open a case, it's the only way to get attention to the problem from those who know best how to fix it. It should be free. In the US: call 1-866-PCSAFETY, check their website for other countries, support with patches should always be free.
• Do read through for your specific combination of .NET framework version and you specific OS the relevant KB, some of them were prepared in anticipation of certain problems. They are all linked from KB 931212.

--
Swa Frantzen -- NET2S

Update

A reader (thanks Jordan) provided the following work around (a few other blog sites seem to concur)

" Basically, get the dotnetfx.exe (v1.1 or 2.0) and extract the file. You'll see a netfx.exe file, now download the windows update manually and run it, when it asks to browse for the file just navigate to the extracted netfx.exe and you're good to go."

Mark - Shearwater