Still offline 3.5 SP1 does install 2.0 SP2 and 3.0 SP2. It’s not a guess or opinion, it’s what I do for every PC I need to setup or bring up to date.

I clearly have no insight in your situation, and there could be issues that required step by step reinstall of everything.

But for clean computer installing 3.5 SP1 works perfectly.

Excerpt from:
http://support.microsoft.com/kb/923100

Note This cleanup tool deletes shared files and registry keys that are used by multiple versions of the .NET Framework. To guarantee that all versions of the .NET Framework work correctly, if you run the cleanup tool to remove the .NET Framework, you must first remove all installed versions of the .NET Framework by using this cleanup tool. Then, you must reinstall all the previously installed versions starting with the lowest version number.

I had to reinstall ALL previous versions! 3.5 SP1 would not install w/o the others. I spent a lot of time on fixing up .NET including 2 hours on the phone with an MS support rep, who also confirmed that ALL versions had to be reinstalled.

Actually 3.5 does includes 3.0 and 2.0, but not 1.x Try clean install and you will see that. I don’t know if it depends on installer type though, I use offline one (~240MB).

This was trouble for a while when some apps required 1.x deliberately, but at moment everything moved on and 3.5SP1 covers everything. For now. :)

Why doesn’t M$ incorporate prior versions of .NET framework into the current release? WHY does M$ force users to have to maintain all these variations of the framework?

C:\WINDOWS\Microsoft.NET\Framework\v1.0.3705
C:\WINDOWS\Microsoft.NET\Framework\v1.1.4322
C:\WINDOWS\Microsoft.NET\Framework\v2.0.50727
C:\WINDOWS\Microsoft.NET\Framework\v3.0
C:\WINDOWS\Microsoft.NET\Framework\v3.5

Jeez…