Only way I found to fix this is:
1. Install IIS.
2. Go to c:windowsmicrosoft.netFrameworkv2.0.50727 (or another version that contains the aspnet_regiis.exe)
3. Run aspnet_regiis.exe /i
4. Uninstall IIS (do not want to have FTP, SMTP and WWW installed on a workstation).
Hope this helps others.
Done deal.