One solution for fixing the .NET 1.1 SP 1 problem
Thanks to Stewart Basterash for the following solution (slightly edited):
1) Uninstall D8, also removing any other elements it installed including J# .NET Redis, .NET SDK, and .NET Framework, and third party tools (Component One, etc).
2) Physically remove the Delphi BDS directory... Installer will not entirely remove a directory and files that have been altered...
3) Make sure the .NET framework is removed... When fully removed Windows Update should report that your machine is up to date... .NET is an add-on and if it is not there, there is no update available...
4) Reinstall Delphi 8 using the .NET framework that Borland provides on the Delphi 8 CD...
5) Reinstall Delphi 8 SP2...
Now everything is fine except Windows Update wants to install .NET SP1... You need to shut off automatic updates or you're in trouble again...
D8 sucks and so does that solution! The best solution of all, bin Delphi and use Visual Studio .NET instead!