Help! My .NET Setup Package Is Throwing a System.BadImageFormatException Error 1001

Recently I had a WCF service install package that was upgraded from VS.NET 2008 to VS.NET 2010 fail with the following error message upon installing it locally on my machine:

"Product: MyWCFService -- Error 1001. Error 1001. Exception occurred while initializing the installation: System.BadImageFormatException: Could not load file or assembly 'file:///C:\Program Files\MyApps\WCFServices\MyWCFService.WinServiceHost.exe' or one of its dependencies. This assembly is built by a runtime newer than the currently loaded runtime and cannot be loaded.."

You might also see the following warning issues by the compiler:

"The target version of the .NET Framework in the project does not match the .NET Framework launch condition version '3.5.30729 '. Update the version of the .NET Framework launch condition to match the target version of the.NET Framework in the Advanced Compile Options Dialog Box (VB) or the Application Page (C#, F#)."

Well this was interesting to me because this was being displayed on a machine that has everything: .NET Framework 4.0, tools, you name it. There should be nothing missing. That's the 1st place to start obviously - make sure the .NET Framework is installed on the target machine.

However this was not the case in my scenario. It turns out even though all of my project comprising the setup package targeted the .NET Framework 4.0, and even the Setup package prerequisites indicated the .NET Framework 4.0, there was still 1 piece of the puzzle missing.

The problem: under the "Detected Dependencies" list for the setup project the 1st item listed was "Microsoft .NET Framework". Refreshing the dependencies does nothing for this value; it must be reconfigured manually. Double click the "Microsoft .NET Framework" item to bring up the "Launch Conditions" window and properties. In the 'Properties' window, change the 'Version' attribute to .NET Framework 4.0 (or whichever framework for your scenario). The Launch Conditions window is displayed below. After making the change, the installer package worked perfectly and installed without issues.