Your solution worked perfectly for me and I didn't have to uninstall .NET 1.1.
Here's exactly what I did:
1. Download DotNetFX.exe for the .NET 1.1 version.
2. Run the DotNetFX.exe install package only to the point of gettting it to extract the installation media.
a. Find the aforementioned installation media and COPY IT to a location of your choice. I found mine in c:\Documents and Settings\{youruserid}\Local Settings\Temp\IXP000.TMP\
b. Cancel the installation process initiated in step 1. You will still have your copy if you performed step 2a as instructed.
3. Download KB953297 (NDP1.1sp1-KB953297-X86.exe) as Adamjv12345 suggested.
a. Run NDP1.1sp1-KB953297-X86.exe.
b. It will fail but will give you the opportunity to point the process at the folder containing netfx.msi AND netfx1.cab. At this point, browse to the folder where you copied the DotNetFX.exe extraction from step 2a above.
c. The KB953297 update should complete successfully.
4. Since I manually control my Windows Updates, I double-clicked the Windows Update shield icon on my system tray where the annoying KB953297 was waiting to be applied ... for the umpteenth time.
a. Let KB953297 run from Windows Update. It will quickly see that it has already been applied (step 3 above) and will complete successfully and will go away forever. Good riddance to KB953297!! Sometimes you just wanna kick the sloppy Windows Update developer and QA team. It just shouldn't be this much of a hassle to apply a stinking security patch. Enough squaking on my part ...
Good Luck!