Faulting application...faulting module kernel32.dll, Source - .NET Runtime 2.0 Error Reporting

I am getting following error once I double click on the executable of the custom application

Faulting application km.exe, version 1.0.0.13965, stamp 4486cb6c, faulting module kernel32.dll, version 5.0.2195.6946, stamp 40d223b8, debug 0, fault address 0x0002bbf3.

Km.exe is my custom WINFORM application executable.

I believe the above is a common Error Message. It has been a very frustrating experience for last two days and today.

Here are details of the application:-

.Net 2.0 Application , Converted from 2003 using VS 2005. WINFORM Type Application.

Project References
Microsoft.VisualBasic
System
System.Data
System.Data.Collections.
System.Data.SqlClient
System.WinForms
System.Drawing
System.Diagnostics

The SUB MAIN () in Module file has code snippet to process any unhandled Appdomain Exception .

Test Machine has : MDAC 2.8 (SP1 for XP SP2 or 2.81.1117.0) and .Net 2.0 run time ( 2.0.50727)

ClickOnce (Full Trust security for test purposes) and WindowsSet Up Installer methods used (seperately) to test installation.

Surprisingly, When I started a brand new project with VS 2005 and replicated some of the functionality (e.g. adding MDI form, Tree View and populate Tree view ) everything worked fine.

Any guesses on cause of this error or solution on how to get this error resolved and run the application successfully.

Any help is greatly appreciated.

Thanks

HM