I am developing a .NET 4.0 application. It runs fine on the development machine (win7 32bit), but it reports this issue when installed and started on a win7 64bit machine.
I think the issue has something to do with the System.Data module, because the very first thing the application does is to access database. I use the Entity Framework.
Would you please help? or at least give me a hint or a similar experience?

You should, IMO, either run the application on the target machine under a debugger (such as WinDbg), or take a crash-dump and analyze it (right-click the process in Task Manager, choose "Create Dump File"). This would allow you to know what is really happening, rather than guessing.