I assume you are attempting no touch deployment through IIS.
The .NET runtime installs some extra functions on the client under administrative tools in control panel. You need to set security in there to give your application full trust for the server you are deploying it from. You could build this into your install package.
You may also want to get hold of a little program called Netrun which will launch your app without throwing up a browser window and it also overcomes the issue that IIS doesn't like serving app.config files.
(I found this out from "Fast track
VB .NET")