Update 982167 and update 982168 update the .NET Framework 2.0 feature layer in the .NET Framework 3.5 SP1 to introduce the new type 'System.Security.Authentication.ExtendedProtection.ExtendedProtectionPolicy'. This new type is used by the corresponding new feature in Windows Communication Foundation.
The error occurs because the underlying .NET Framework 2.0 SP2 Network Client Library feature layer is not updated when the Windows Communication Foundation feature layer is updated to use the new type. The underlying .NET Framework 2.0 SP2 Network Client Library feature layer does not support this new type, and so this error is thrown.
This scenario may occur for several reasons, including certain installation failure issues that are related to dual branch servicing. For more information, click the following article number to view the article in the Microsoft Knowledge Base:
960043 Dual Branch Servicing for the .NET Framework 2.0 Service Pack 2, the .NET Framework 3.0 Service Pack 2, and the .NET Framework 3.5 Service Pack 1