SB 1.2 targets .Net 4.5.
Do you have any extensions installed, errors can happen if the SB/lib folder contains bad dlls or expecially SmallBasicLibary.dll - as a test make sure there is nothng in the extension SB/lib folder.
I would possibly then try uninstall SB/delete SB installation folder and reinstall SB, but I doubt that would solve - most likey is the extension lib folder.
I would also save the hello world program somewhere you definitely have wite access - e.g. MyDocuments. Then try running it, is an exe created in this folder when you run it?
Also try cleaning you temp folder - it can get stuffed with aborted SB files.
If any above not clear how to do then ask.