.net 3 is only 4 new technolgies (WCF, WPF, WF, Cardspace) which are based on .net 2.0. .net 3.5 adds a new compiler which supports LINQ and some other stuff, but it is still based on the .net 2.0 runtime. to use .net 3.5 you must have .net 2 and 3 installed. Install the .net 3.5 Sp1 Installer and you'll get the SPs for .net 2 and 3.