Just over a week ago Service Pack 2 for SQL Server 2008 was published to Microsoft Update as an optional update. We have been notified that customers are hitting error 0x84C40007 when the Microsoft .NET Frameworks 4 Client Profile is already installed. Below is information on this issue.
This error occurs when installing SQL Server 2008 Service Pack 2 on a computer with Microsoft .NET Framework 4 Client Profile already installed. SQL Server 2008 does not require .NET 4, it only requires .NET 3.5 SP1. But if the .NET 4 Client Profile is installed, SQL Server Setup will try to use .NET 4. Setup needs to block the installation, since the complete set of .NET libraries is not in the .NET 4 Client Profile. This block is seen as Error 0x84C40007.
To resolve the problem, please install the full Microsoft .NET Framework 4 package.