Hi I found the answer at http://saranspot.blogspot.com/2009
the problem is that windows 7 will not let dot net 1.1 install without service pack 1 but can't add service pack 1 until dot net 1.1 installed catch 22 situation. The above link explanes exactly and precisely how to stream the two msi files and install both the dot net framework 1.1 with service pack 1 at the same time.
This worked perfectly on my new win 7 64 bit dell laptop and Now I can run all my old legacy 1.1 apps without having to upgrade them to 3.5 or 4.0.
I also have 3.5 and 4.0 version apps running on the same machine.