Go here:
http://www.asp.net/faq/SideBySide.aspx

Follow the instructions (pictures are a real help).
Assuming you've already installed :

dotnetfx.exe
mda 2.7

Go to your dos prompt and , again , just follow the pictorial guide from the site. I had the same problem, and this worked.

One more thing: don't put your .aspx in a folder like "My Documents"
or anything where there's a space in the words. It will give you an error, as I found out when you try to run a .aspx file. Just remember - One word directories and folders or ones joined by "_" like "my_files"

Please spread the word about the site, it will be helpful to others with the same prob.