This could be because of a corrupt configuration file for PortalShield. Please refer to KB66657 for detailed steps for fixing it.
If the above does not solve the issue, there is a similar issue reported with GroupShield and KB57365 lists the steps needed to correct the permissions on the VirutalDirectory hosting that product to 'Scripts and Executables' from the earlier setting of Script Only.
The same steps would apply to PortalShield as well - except that you need to substitute the PortalShield Virtual Directory where the KB refers to the GroupShield virtual directory in IIS.
Also, as you may be already aware PortalShield 1.0.1 is going End-Of-Life (EOL) on March 31, 2010 - refer KB66657 , it would mean moving to the latest supported version of the Product (2.0 Service Pack 1 - currently). The 2.0 Service Pack 1 is quite stable and fixes several issues reported earlier. If you still face stability issues after upgrading, please log a case with McAfee Support to investigate it.