Visual Studio 2008 (formerly codename "Orcas") has been in Beta 2 for a month or so. I have been spending a good amount of time with it. It is great to have the ability to target multiple versions (.NET Framework 2.0 and.NET Framework 3.5) of the .NET Framework in the same IDE. This link to a Visual Studio 2008 overview provides a handy guide to what's new:
ScottGu's Blog provides a great ASP.NET-focused overview on Visual Studio 2008 here. It includes an answer to the question of "Why should I use Visual Studio 2008 when I am still working on .NET Framework 2.0?"
If you want more of a feature-by-feature overview of Visual Studio 2008, a link to the specifications for Visual Studio 2008 and .NET Framework 3.5 is available here.