Most of you who have worked with Visual Studio 2008 would love the fact that it supports multi-targetting i.e. targetting different versions of framework v2.0, v3.0 & v3.5. To give a quick background, earlier versions of Visual Studio were tightly integrated with the framework to give maximum benefit. See the chart below
.NET Framework 1.0 Visual Studio .NET 2002
.NET Framework 1.1 Visual Studio .NET 2003
.NET Framework 2.0 Visual Studio 2005
.NET Framework 3.0 Visual Studio 2005 + Workflow Extensions, and VS 2005 Extensions for WPF & WCF
.NET Framework 3.5 Visual Studio 2008
.NET Framework 3.0
.NET Framework 2.0
If you notice the above list, you find that there has been a respective tool for every version of the framework and none of them can be interchanged i.e. .NET Framework 2.0 doesnt work with Visual Studio .NET 2003 and Visual Studio .NET 2002 cannot be used to create applications targetting .NET Framework 1.1.
But with .NET 3.0 we didnt have an equivalent Visual Studio edition. Instead you just have to download the extensions (for free) and use Visual Studio 2005 for creating WPF, WCF, WF and WCS Applications.
Also, ASP.NET AJAX v1.0 was released as a separate add-on to work with ASP.NET 2.0 and Visual Studio 2005.
So when you open an application written using Visual Studio .NET 2003 and .NET Framework 1.1 in Visual Studio 2005 editor, it will give you the conversion wizard for upgrading to .NET Framework 2.0. This was sort of annoying for certain people who wanted to retain the framework version but still work with the newer version of the tool.
With Visual Studio 2008 we ensured that you can create / open applications targetting .NET Framework 3.5, 3.0 and 2.0. The File - New - Project / Website wizard provides you the drop down to chose the framework version to target. Based on the version of framework you chose, the relevant templates, references and toolbox get generated.
Coming to the original intent of the post, if you want to use Visual Studio 2008 and create an ASP.NET 2.0 Application you could do it out of the box as described earlier. However, if you want to use ASP.NET 2.0 as well as the ASP.NET AJAX v1.0 Library there is no built-in "AJAX Enabled ASP.NET 2.0 Website" template to achieve this.
But we shipped "Microsoft ASP.NET 2.0 AJAX Templates for Visual Studio 2008" in mid December 2007 as an add-on that one can install on top of Visual Studio 2008. Once installed, it gives you the option to create ASP.NET 2.0 AJAX Enabled Website using Visual Studio 2008.
You can downlod this add-on for free from here
This is only when you want to use ASP.NET AJAX v1.0 and ASP.NET 2.0 while working with Visual Studio 2008. If you chose the framework target version as .NET 3.5, then a simple File - New - ASP.NET Website has built in AJAX Library and controls that can be used.
Well, its quite a lot of information and confusing as well. So feel free to ask if you have a doubt.
Cheers !!!