Blimey, this is an odd one :(
Do you have any logs in the following directory?
C:\Documents and Settings\[username]\Application Data\Filter\Logs
Do any .NET applications work? I suspect not...
Have you tried uninstalling the application and reinstalling it, since you've installed .NET 1.1?
Have you done a Windows Update to ensure you've got the .NET 1.1 Service Pack?