Visual Studio 2008 is support for framework multi-targeting. This enables you to use VS 2008 on .NET 2.0, .NET 3.0 and .NET 3.5 projects, and does not require you to upgrade your projects to the latest version of the .NET Framework in order to take advantage of new Visual Studio 2008 features.
Out of the box VS 2008 doesn't include project templates for creating brand new ASP.NET 2.0 with ASP.NET AJAX 1.0 applications. Currently web free web download for VS 2008 that enables these project templates options. You can download them here
Once these additional project templates are installed, you can use File->New Project or File->New Web Site within VS 2008 to create ASP.NET AJAX 1.0 applications that run on ASP.NET 2.0:
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