The VS 2008 Redistributable has installed successfully. I can see it listed under the Control Panel -> Programs.
Also, the problem is not seen when the application is installed on a clean machine. Only after other products, that are using older versions of VS Redistributables, were installed that the problem surfaced.
Now, I have uninstalled all the other products and reinstalled the application. Still, no luck.
I manually reinstalled the VS 2008 Redistributable.