Daniel Moth has two good posts on Visual Studio 2008 and the .NET Framework 3.5:

• Visual Studio 2008 stack

• .NET Framework 3.5

A summary:

• The CLR isn't changing -- still the same CLR as VS2005
• New languages C# v3.0 and VB9
• The framework libraries don't change from 3.0 to 3.5, and just add additional namespaces (just like the move from 2.0 to 3.0)
• LINQ is the big ticket item for me, but there are also some interesting networking and addin libraries, as well as enhancements to WCF and WF

A big feature of Visual Studio 2008 is the multi-targeting ability, which allows you to target the 2.0, 3.0 or 3.5 libraries from one IDE. No more side-by-side Visual Studio installations!