Just sharing my experiences with this error.
I have a brand new box, like I literally just loaded Win 7 Enterprise N 64 on it Monday. I of course patched everything and it was up to date and good to go.
I've done nothing but copy eq2/is from another PC, and setup the game.
Today I received the .NET initialization error on this machine:
.NET initialization error (code 3 - 80131522)
ISXEQ2 *REQURES* the installation of .NET 4.0, even on a fresh
Please download and install this version of the .NET 4.0 frame
Now, downloading the link provided wasn't much help as I already had .Net 4.0 running on the box. I went so far as to install the .net verification tool and validated my install was good.
Next I reverted my IS build to 5670, please note first go into your current build and disable auto patch. Download the files from the IS archive and copy over the files in your IS folder.
Running the old build of IS, and everything worked.
So I figured, ok lets re-run the patcher and verify it was the latest IS build that broke it. Patched up, and everything still works.
I'm at a loss of exactly where the problem is, but I would suggest you guys run the old build and see if the same thing works out for you.
IS Archives -
http://www.lavishsoft.com/innerspace/archives