Don't you just love these error messages?

If you are trying to install the Visual Studio extensions after you installed .net 3 SP1 you may get this message. Fortunately there is a solution. Even if it is a workaround and not a "solution".

The workaround is pretty simple and worked for me. You can read about it here http://forums.microsoft.com/MSDN/ShowPost.aspx?PostID=2550726&SiteID=1

But basically you are just creating a registry key that tells the installer that .net 3 is installed and not to worry about it. After you do this you should be able to install your extensions.