***ISSUE RESOLVED***
Thank you Jon, I'm pretty sure you were right. I finally got around to fixing this. Here's what I did to fix the problem (as I'm sure there are others who can learn from my solution):
At first I did exactly as you recommended, I tried both reinstalling SP3 and reinstalling the .NET Framework. SP3 installed fine, but DisplayFusion still crashed on load. I couldn't reinstall or uninstall either .NET Framework 1.0 or 2.0, all I got was an error message that the uninstall failed. At this point I knew that DisplayFusion needs the .NET Framework to run, and I just assumed that it got corrupted when Windows Update tried to install SP3. After a long while, I found the time to investigate this problem, and stumbled upon a solution, called "
Windows Install Clean Up". Windows Install Clean Up is a utility Microsoft makes to allow you to uninstall corrupted installs of any program (If MSFT didn't totally suck, this feature would just be a part of windows, am I right?). Once I installed it, it was no problem to remove all the .NET installs and reinstall the latest versions. Afterwords, I had to uninstall and reinstall DisplayFusion before it would work again (and of course I restarted after every point to make sure everything installed properly).
Download Windows Install Clean Up:
http://support.microsoft.com/kb/290301
So, I'm certain that it was a corrupted install of the .NET Framework. If anyone else can't uninstall .NET, tell them to use this utility. Hopefully this will help others who run into this problem.