I tried to run the msi file on my vs2005 machine so I can compile with project there, and it says v2003 is required on machine.

So I copied the install from my other machine in. I expected that to run okay after taking the config requirement for 1.1 out, but I get license has been changed and is therefore invalid. I recopied the license file, but same result.

What do I do next?

There's an encryption issue with .NET 2.0, I think this will be fixed for the final of 2.0, so you can't run it on .NET 2.0, you have to have .NET 1.1 sp1 installed. You can just install the runtimes of .NET 1.1 sp1, so the dotnetfx11 installation of 20MB will do.