Here's the fix that I use for clients of my computer business!
Be sure to restart between each uninstall so that the system knows what is going on and will cause fewer anomolies in the installs. YOU HAVE BEEN WARNED!
Step 1
Uninstall all .NET Framework entries in the installed program list in the reverse order of installation. ie 1.1 update, 2.0 version, 1.1 version.
Step 2
Uninstall windows Explorer since this becomes unusable with .NET Framework being uninstalled.
Step 3
At this point the ATI program for the tray icon called "cli.exe" should be turned off using MSCONFIG's last page (just uncheck and apply) Do a restart again here.
Step 4
Reinstall Internet Explorer using the install window programs function.
Step 5
Restart again and go to the windows update site to reinstall "ALL" .NET Framework materials in
the correct order (You will have to do this twice to get everything since only the basics are originally listed)
Step 6
This should be all you have to do but just in case there is a problem at this point simply uninstall the ATI graphics drivers now and reinstall (or you might get away with just having the program "Repair" what you have.
Good Luck!
Doug