If you are having problems with the 1.7 Patch, then you're using "Game of the Year Edition".
To fix it, uninstall Fallout 3 by inserting DVD1 and running setup, selecting remove (you will have the option to keep your saved games!).
Then goto Control Panel>Programs and Features (for Windows 7 users). On the left you will see "Turn Windows Features On or Off" - click it. Click on the [+] box next to Windows .NET Framework 3.5.1 to expand the selection and tick the two empty boxes that appear. The click OK and wait patiently until it silently installs the required features.
Once the installation is removed and you've updated the .NET framework, run setup again from DVD1 to create a clean installation. Choose a SIMPLE installation rather than custom. When this has completed, do not run the game.
Insert DVD2 and run setup. When this has completed, run the patch making sure you have dowloaded the correct one (I'm using the UK version of the game so I use the UK patch!).
WHen the patch has installed it will exit. Cancel any other messages.
Re-insert DVD1 and select Fallout 3 from Start Menu>Games.
All done and dusted!