With latest release of Windows Azure, Cloud service user can run their cloud service application in Windows Server 2012 OS. If you have seen the new portal you may have seen the following new addition:
Currently this settings is available only for new application and any of your Windows Server 2008 SP* or Windows Server 2008 R2 based application cannot be migrated to Windows Server 2012. So if you application is running with OS Family 1 (Windows Server 2008 SP*) or 2 (Windows Server 2008 R2) you cannot migrate to Windows Server 2012.
As you may have already seen that SDK 1.8 supports .net 4.5 if you want choose .net 4.5, you must use OS family 3. OS Family 1 and 2 does not support for .net 4.5 based application. Also OS Family 3 will only support .NET 4.0 and higher.
<ServiceConfiguration serviceName="WindowsAzure2012" xmlns="http://schemas.microsoft.com/ServiceHosting/2008/10/ServiceConfiguration" osFamily="3" osVersion="*" schemaVersion="2012-10.1.8">
If you have an existing .NET 3.5 application, which will be only supported on OS Family 1 and 2.
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