Our goal with the .NET Framework 3.5 was to make it very easy for customers to adopt while providing some really interesting new value. The "easy to adopt" comes from what we call the "Redbits".. There we are using the same core bits as .NET Framework 2.0 and 3.0 (we just rolled in an SP1 to fix customer reported issues and such)... there should be no breaking changes there and these SPs will be made available on windows update for everyone with 2.0 and\or 3.0...
The new value comes from the "greenbits" that are brand new assemblies.
Daniel also has a good list of the new stuff in .NET Framework 3.5
1. System.Data.Linq.dll – The implementation for LINQ to SQL.
2. System.Xml.Linq.dll – The implementation for LINQ to XML.
3. System.AddIn.dll, System.AddIn.Contract.dll – New AddIn (plug-in) model.
4. System.Net.dll – Peer to Peer APIs.
5. System.DirectoryServices.AccountManagement.dll – Wrapper for Active Directory APIs.
6. System.Management.Instrumentation.dll – WMI 2.0 managed provider (combined with System.Management namespace in System.Core.dll).
7. System.WorkflowServices.dll and System.ServiceModel.Web.dll – WF and WCF enhancements (for more on WF + WCF in v3.5 follow links from here).
8. System.Web.Extensions.dll – The implementation for ASP.NET AJAX (for more web enhancements, follow links from here) plus also the implementation of Client Application Services.
9. System.Core.dll – In addition to the LINQ to Objects implementation, this assembly includes the following: HashSet, TimeZoneInfo, Pipes, ReaderWriteLockSlim, System.Security.*, System.Diagnostics.Eventing.* and System.Diagnostics.PerformanceData.