The problem appears to be a failure to read some IE-related values from the registry. The hotfix on the page below link (which is included in the latest service pack, so you probably do not need the hotfix) adds the ability to ignore these errors by setting a registry key:
- Locate and then click the following registry subkey:
Note If the FEATURE_IGNORE_ZONES_INITIALIZATION_FAILURE_KB945701 subkey does not exist, you must manually create it. If you’re using a 64 bit OS, you may need to use HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\Microsoft\Internet Explorer\MAIN\FeatureControl\FEATURE_IGNORE_ZONES_INITIALIZATION_FAILURE_KB945701 instead (thanks Brad Baker!)
- Right-click FEATURE_IGNORE_ZONES_INITIALIZATION_FAILURE_KB945701, point to New, and then click DWORD Value.
- Type w3wp.exe to name the new registry entry, and then press ENTER.
- Right-click w3wp.exe, and then click Modify.
- In the Value data box, type 1, and then click OK.
After setting this registry key, a simple app pool restart will apply the change. No longer will your .NET COM components randomly stop working with no real solution except shuffling application pools!
Microsoft knowledgebase article KB945701. (For Hotfix)