This has bothered me for two weeks. There was no way to install .NET Fx 1.1 on a Vista 5456 box.
Here's the solution: http://blogs.msdn.com/astebner/archive/2006/07/06/658484.aspx
After the permission fix, Framework 1.1 and SP1 for 1.1 install flawlessly.
Thanks Aaron Stebner!