I was facing some issues getting Crystal Reports XI Release 2 to install. The installer was complaining that .NET 1.0 or 1.1 should be installed. This was kind of a confusing message, since .NET 1.0 and 1.1 were both installed on the box.
The workaround is to uninstall all versions of .NET except 1.0 and 1.1 temporarily. In my case I had to uninstall .NET 2.0, 3.0, and 3.5 to get this to work. Once it was completed installing, I reinstalled all the uninstalled versions of .NET.