Sure you need the .NET runtime. But that shouldn't be a problem, should it. By the end of 06, all systems without it won't run many apps anymore anyway.
Sorry, this is just wrong. Have a look at the number of people still running Windows 98, ME, NT, and 2000. The numbers are posted on Indie Gamer from time to time.
Also, based on my experience the .Net framework and even DirectX 9 greatly increase the changes that your game will not work because of missing files.