Going through the Windows Event Log revealed an error message with the description
.NET Runtime version 2.0.50727.3053 – Fatal Execution Engine Error (6C8B7706) (80131506)
The exception seems to be not a common one and searching the web revealed only one Microsoft forum post. The Microsoft forum post is unanswered.
I decided to fix the issue by reinstalling the .NET framework. The only entry available in Add/Remove programs was “Microsoft .NET framework 3.5” (surprisingly there were no entries of .NET framework 2.0 & 1.1 even though they are installed on my laptop). I reinstalled .NET framework 3.5 after uninstalling the existing setup.
After the reinstallation I launched VS.NET 2008 IDE and the result is same – It closes automatically after displaying Start Page.
Spending 4 hours on various software reinstalls has not yielded any positive solution. Then I decided to restore my Windows Vista OS to the state it was before the recent Windows Update. With the help of System Restore utility I restored the Windows Vista OS to the state it was 4 days ago and the problem is solved :)
Even though this might not be the right way of fixing the problem, it got a work around solution and able to continue web development. If any of you are facing similar kind of problem, use this solution as your last option. If you find a better solution, please let me know.