Side by Side object question

[CSharper]

Hello,

I came across a situation where I have a dll that is downloaded as a
activex control. When I tried to run the web app which this control is
used, the control load fails looking for VS 2005 SP1. I found the 2
dependent dll that was causing the problem from VS 2005 SP1. I copied
the files to the download folder where I have downloaded dll ran the
regsrvr, the registration failed. I copied the dependent dll to
system32 and ran regserver and still registration failed. Later I
found a directory of another application which uses the same dll (in
this case the dll reside on the same folder of the application), I
dropped my dll in the application folder and ran the registration,
this time registration was successful.
Now I reimage the box to the same stage where my registration was
failing and ran VS2005SP1 exe from microsoft web site and then ran the
registration now it worked. So I have couple of questions
1. Why my registration failed, when I copied the dependent dll to
system 32 or to the same directory where I have my dll?
2. Why registration was successful when I copied my dll to a directory
where these dependent dlls already exists?
Can any shead some light into this?

Thanks a lot.