First, the answer to your 'what is it?' question. Very few programs are built these days completely from scratch; they almost all use pre-built libraries of routines associated with the programming languages in which they are written. In the old days, when such libraries were relatively small, they were specific to the program and usually installed as part of it. These days, programs often use pre-installed libraries. .NET is Microsoft's current, and most comprehensive, offering of this kind. It serves a number of the Microsoft languages, and comes installed as part of the more recent versions of Windows.
.NET can be problematic if it is wrongly updated. In my experience, once you get problems it is better to uninstall the whole thing and reinstall. If it comes as part of the OS, there will be no installation entry, so you have to install then uninstall it from a download, then reinstall.
I would expect Eraser to work perfectly well under .NET 4, which is supposed to be compatible with programs written for earlier versions. But .NET 4 tends to need the latest Service Pack for each Windows version (e.g. SP3 for XP). And, as I said, installing on top of a version with problems can be tricky.
I would now uninstall .NET versions 2 and 4, and download and install 3.5; even though it is not the latest version, it seems to be the one that is most widely used.