The .NET framework is not installed as a Windows service (and it can't be, because it's supposed to run on Win9x/ME as well, which don't have services at all). Once the framework is installed on the machine, you can run any .NET application by just starting the exe.
The ServicePack2 for Windows XP includes the .NET Framework v1.1.
Otherwise, you would need to install the Runtime atleast to run apps.
Download here.
Regards,
Vikram
Vikram,
The .NET Framework is not installed by Windows XP Service Pack 2. However, if you received SP2 via a CD, it may be included on the disk but you will need to install it manually.