Test if .NET Framework 2 is installed
1. Click on this link to C:\WINDOWS\Microsoft.NET\Framework (it will open in a new window).
2. If you can see a folder called v2.0.50727, then you have .NET Framework 2.0 installed.
3. If you cannot see a folder called v2.0.50727, then you do not have .NET Framework 2.0 installed.

Troubleshooting
There is a slight chance you do not use the 'C:\WINDOWS\' folder. If this is the case, copy the following line
%systemroot%\Microsoft.NET\Framework
then paste it into Windows Explorer and press enter. This will take you to the same folder mentioned in 2. above.

Source of this information
This test is based on information from here.