My reference to the post in 2009 can be found in http://www.bleepingcomputer.com/forums/topic249947.html
I just ran "ngen.exe executequeueditems" again and everything appears to be working. Following is a copy of the cmd.exe window.
Microsoft Windows XP [Version 5.1.2600]
© Copyright 1985-2001 Microsoft Corp.
C:\Documents and Settings\Fred>cd C:\WINDOWS\Microsoft.NET\framework\v2.0.50727
Microsoft ® CLR Native Image Generator - Version 2.0.50727.3053
Copyright © Microsoft Corporation. All rights reserved.
All compilation targets are up to date.
I checked Microsoft update and noticed that update KB2686828 was successfully installed on both June 22 and June 23.
So I guess the problem has been rectified somehow.
Topic can be considered closed.
Have a great day