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Are you sure your question is related to PeopleSoft, because PeopleSoft is on BI Publisher 10.1.3.3.2 on PeopleTools 8.52.
Did you manage to resolve this? I have the same error.
I ran into the same error today after installing BI Publisher Desktop 220.127.116.11 that is delivered with PeopleTools 8.53.
I managed to solve it by running Windows Update on Windows Server 2008 and installing a couple of hundred windows updates. After it finished installing all windows and office updates, I uninstalled BI Publisher Desktop and re-installed it.
After this the error disappeared and I was able to use BI Publisher Desktop.
Probably missing some pathes for .Net.
Thought I would share my findings.