.NET Security Settings Error on startup w/ Windows 7Pro and IE8

There are a lot of posts with this error and I think I've tried all of the solutions available to me.  I'm running Windows 7 Pro x32 and IE8.  I ran the SDNS tool from my desktop as an administrator.  I got this log:

[========================================================]
   Setting security for .NET 2.0 ...
[========================================================]


WARNING: It seems like a group with the membership URL similar to
         "http://161.242.85.11/InnovatorServer/" already exists:
   ...
   1.6.  Url - http://161.242.85.11/InnovatorServer/Client/cbin/*: FullTrust (Exclusive LevelFinal)
   ...

NOTE: creation of multiple groups with the same name or the same 
      membership URL can cause problems when running Innovator


Removing existing group shown above and create a new
group with membership URL "http://161.242.85.11/InnovatorServer/" ....


[--------------------------------------------------------]
   Delete old group with membership URL "http://161.242.85.11/InnovatorServer/" ...
[--------------------------------------------------------]

Microsoft (R) .NET Framework CasPol 2.0.50727.5420
Copyright (c) Microsoft Corporation.  All rights reserved.

Removed code group from the Machine level.
Success


[--------------------------------------------------------]
   Create new group with name "http://161.242.85.11/InnovatorServer" ...
[--------------------------------------------------------]

Microsoft (R) .NET Framework CasPol 2.0.50727.5420
Copyright (c) Microsoft Corporation.  All rights reserved.

Added union code group with "-url" membership condition to the Machine level.
Success

Per other forum entries, I've downloaded and run MSXML 4.0 SP3.  My Microsoft.Net\Framework directory has entries for v1.0.3705, v1.14322, v2.0.50727, v3.0, and v3.5. 

I've added http://161.242.85.11/InnovatorServer/ to my list of trusted sites and enabled everything that I have access to change in the custom configurations.  Is there a list of what specific options need to be checked?

Any other tips/tricks/ideas would be appreciated.  Also, I'd like to run the .Net config utility shown in the .NET configuration file on the support page.  What is the executable name and if it's not part of the standard 2.0 install anymore can I get it separately? 

thanks,

Ron CK