Today the Server and Tools division at Microsoft where I work now released Visual Studio 2008 SP1 and the .NET Framework 3.5 SP1. This is actually a big release and contains a lot of bug fixes and goodies for developers.
The one I will call out as I am doing more work on it is the Client Profile formerly code named Arrowhead. What the client profile does is allow developers to release a much smaller .NET redistributable. With a little bit of elbow grease you can chain your install with a ~30MB redist of .NET for XP. This smaller redistributable gets its size decrease by packaging client assemblies for WPF, WinFX and client side WCF. By allowing for a subset of the framework machines that do not have the framework can get the .NET framework quicker. I will talk some more about this in another post so stay tuned.