Thanks for your help. I tried those steps, and Windows did in fact find corrupt files and repaired them successfully. However, I am still getting the same error when I try to run Display Fusion.
That article describes how to repair the built in versions of .NET for Windows 7 which are 2.0, 3.0, and 3.5. Could you check Control Panel > Programs and Features to see if you also have .NET 4.0 installed? If so, can you try uninstalling it temporarily to see if DisplayFusion will work?