With Orcas hitting beta 1, the .NET Framework version 3.5 naturally has also hit beta 1. Since Microsoft decided to rename WinFX as .NET 3.0, there has been a lot of confusion as to what exactly is in each version. Like 3.0, 3.5 is not a new version of the .NET Framework itself, it continues to add upon the 2.0 Framework with new features. That being said 2.0 and 3.0 are prerequisites of installing 3.5 whereas you can install 2.0 on a machine without 1.0 and 1.1 (thus proving the point that it is not a totally new framework).
So what does it include? The biggest things are C# 3.0 features such as LINQ, ASP.NET AJAX, and some new clases in the base class library of the framework.
When is it going to be released? Microsoft claims by the end of the year.
Read the complete post at http://www.dotnettipoftheday.com/blog.aspx?id=347