Unsupported XML Core Services Version

Today I was helping someone with an interesting error message when they tried to access the CRM application from the server.  It was claiming that an unsupported XML Core services version was found.  After confirming that in fact XML 4.0 SP2 was installed, and re-installing it just to be sure something else must be going on here.

Turns out, a prompt was giving a clue just before that error - the browser was asking if you wanted to run ActiveX and plug-ins (always a little scary question these days with all the malicious stuff out there!)

Upon saying yes, you still would get the unsupported error you see below.

After thinking about it, it appears that the problem is the failure to load the ActiveX for the XML so it seems to just think it's an unsupported version - Seems misleading to me...but hey who says error messages have to make sense.

So upon further investigation, if you look at the security zone for that page you will see the following

While I haven't parsed through all the settings, I can confirm that this does not happen when you add the site to your trusted sites - once that is done the server was able to load CRM no problem at all.