Earlier today we shipped a public beta of our upcoming .NET 3.5 SP1 and VS 2008 SP1 releases. These servicing updates provide a roll-up of bug fixes and performance improvements for issues reported since we released the products last November. They also contain a number of feature additions and enhancements that make building .NET applications better (see below for details on some of them).
We plan to ship the final release of both .NET 3.5 SP1 and VS 2008 SP1 this summer as free updates. You can download and install the beta here.
At the first link there’s quite a list of enhancements including SQL Server 2008 support, ADO.NET Data Services (formerly code-named "Astoria"), and the ADO.NET Entity Framework and ASP.NET 3.5 extensions previewed in December.