The part of your log showing the error is here:
[03/07/11,16:15:54] Launching process 'Netfx40TestApplication.exe' now
[03/07/11,16:15:54] Process successfully launched. Waiting 300 seconds for it to complete.
[03/07/11,16:15:54] ****ERROR**** Process 'Netfx40TestApplication.exe' exited with return code -2146232576
[03/07/11,16:15:54] ****ERROR**** Verification failed for product .NET Framework 4 Full
Error lookup for that error code:
# for hex 0x1 / decimal 1 :
# Incorrect function.
# 60 matches found for "-2146232576"
This could mean a lot of things.
Unfortunately, this applies to redistributing the .net Framework, and pros and cons of the different methods of doing that, but not quite this problem. That is for post programming.
Firstly, which version of Visual Studio 2010 are you trying to install? Professional, Premium, Ultimate etc.
Next, I need you to run this tool: Visual Studio and .NET Log Collection Utility - Heath Stewart's Blog - Site Home - MSDN Blogs
Upload your logs here. In the event that they are too big to upload here, any file sharing website, such as RapidShare, MediaFire, Skydive etc. Please make sure to set the permissions to public!