Please try the following:
1.Uninstall the .NET Framework 3.5 from Add/Remove Programs (in the Control Panel) on Windows XP or Programs and Features on Windows Vista/Windows 7.
Even if the uninstall fails, go on to step 2.
2.After the Framework 3.5 has been uninstalled or if it failed, download and run the .NET Framework removal tool.
Here's the link to Aaron Stebner's Framework Removal tool on Windows Live Skydrive:
http://cid-27e6a35d1a492af7.skydrive.live.com/self.aspx/Blog_Tools/dotnetfx_cleanup_tool.zip?wa=wsignin1.0&sa=17797669
Aaron Stebner is a Microsoft employee. The tool he's developed is linked on that page and makes easy work of cleaning up damaged .NET Frameworks from your system so they can be reinstalled. When you run the tool, choose the .NET Framework 3.5 from the list and choose to cleanup. After this is done, reinstall the .NET Framework 3.5 that Design 3 needs by running the Expression Design 3 setup package again. It will detect that the .NET Framework 3.5 is missing and reinstall it for you. After that's done, try running Design 3 again.
3.If that still fails to resolve the problem, go to START, RUN and type CMD to run a command prompt. Type CHKDSK /R and hit ENTER. Hit the letter Y and restart the machine. Allow the machine to do the check disk scan. After this is done and it goes back into Windows, try Expression Design again.
more information here