Earlier versions of Visual Studio required you to install the latest .NET Framework version. For example, to use Visual Studio 2005, you also had to install .NET Framework 2.0. A new .NET Framework version may provide additional functionality, but it may also add new .NET Framework dependencies to your projects. These dependencies may prevent your applications from running on systems that they ran on before. That may be a problem if backward compatibility is required for your applications.
However, Visual Studio 2008 lets you target the specific .NET Framework version you want for your project by selecting it in the Framework Version box in the upper-right corner of the Open Project and New Project dialog boxes.
By default, when you upgrade Visual Studio 2005 projects to Visual Studio 2008, they continue to target .NET Framework 2.0. Optionally, you can switch the target from .NET Framework 2.0 to either .NET Framework 3.0 or .NET Framework 3.5, to take advantage of new features in those versions.