Run ASP.NET 2.0 AJAX Extensions 1.0 Setup and immediately click CANCEL button when it finishes copying files and start altering registry. As you click the Cancel button, wizard will pause and ask if you really want to cancel. Do not click Yes or No button.
Open Program Files or Program Files(x86) folder and copy Microsoft ASP.NET folder to your desktop.
Go back to Wizard and click “Yes” button. Wizard will rollback all the actions performed and it will also remove “Microsoft ASP.NET” folder from Program Files/Program Files(x86).
Copy “Microsoft ASP.NET” folder from Desktop to Program Files/Program Files(x86).
Go to Control Panel > Administrative Tools and open Microsoft .NET Framework 2.0 Configuration. Expand My Computer from Left side panel and click at Assembly Cache. Click “Add an Assembly to the Assembly Cache” and add all the DLL files located in \Program Files\Microsoft ASP.NET folder.
Run ASP.NET 2.0 AJAX Extensions 1.0 Setup again. This time Wizard will finish successfully.
Note: If you don’t find Microsoft .NET Framework 2.0 Configuration in Administrative Tools, please download and install .NET Framework 2.0 Software Development Kit (SDK). After installation, use Windows Search to find mscorcfg.msc and double click it to open Microsoft .NET Framework 2.0 Configuration.