This is a type-O in the installation instructions and in the installation program error message. Both have now been updated to reflect that the .NET Framework 3.5 (specifically) is required for PowerWorship 4.0.
Please note, this is a current limitation that will be removed in a future pW service release, when support for the .NET Framework 4.x is available. Please also note that you can enable the .NET Framework 3.5 (or install it in the case of Windows XP) and it can coexist just fine with the .NET Framework 4.x.
Please see the following (newly updated) instructions for information on how to enable the .NET Framework 3.5 in Windows 7
, which is relatively quick via the Control Panel > Programs > Turn windows features on or off. viewtopic.php?f=5&t=586
If you get a chance to try this out, please confirm that this solves the issue and let us know if you have any further questions.