I've been fighting to get this working since before Christmas, and finally got it going by ignoring everything that's written here.
I've tried this, plus a whole bunch of other scripts recommended by other people who have had problems with Microsoft's instructions, in an attempt deploy .NET 3.5 plus all the prerequisites (.NET 2.0, 3.0, rgbrast, etc) to my network via group policy. They all appear to install fine, no errors in the Event Log, they all show up in 'Add or Remove Programs'.
However, if I try to run applications that require .NET 3.5, they crash and only re-installing .NET 3.5 manually fixes the problem.
What I have found is that there appear to be two ways around this:
1. If you use WSUS, deploy .NET 2.0 and 3.0 through that. You can then deploy *only* the .NET 3.5 files extracted via the code on this page. That works absolutely fine.
2. If you don't use WSUS it looks like you can deploy .NET 3.5 via windows update. You'll have better luck using that or manually installing it than trying to work through the instructions on this page.
For crying out loud Microsoft, get your deployment tools sorted out! You tell everybody how great Group Policy, MSI files and WSUS are, and then release .NET 3.5 and DirectX 10, neither of which can be easily deployed across corporate networks.