If you do any .NET development, you absolutely have to see our officially released Product Roadmap.  There's a section on C# futures that should interest developers and EricR did a keynote at VS Live NY with Bix showing off the new features for Windows Forms and ASP.NET.

Some of *my* favorite project improvements are:

SQL Server CLR Integration: Create functions, stored procedures, triggers, types, and aggregates in any .NET language (C#, VB.NET, etc)

Windows Forms No Touch Deployment: "New capabilities will include support for running applications offline, rolling back to previous versions of an application, and listing an application in the Windows Start menu as well as the Remove Programs catalog within the Control Panel. Additionally, No-Touch Deployment in Whidbey will enable developers to distribute the .NET Framework with a Windows client application."

Winforms Improvements: Host Office Documents using the Active Document Container, Office-style toolbars, a better web browser control (no more AX code!), and the background worker for async tasks.

ASP.NET: The DataSource control makes working with relational, xml and other data sources *much* easier.  The GridView is a DataGrid with everything you had to manually add (paging, sorting, editing, and deleting).  The Details View shows you details about a specific record, Master Pages lets you set the UI for your web page once (header, background, etc) and have all other pages inherit that UI.  The ASP.NET team has also gone the extra mile and added themes and skins for easy web site customization.  You really need to see ASP.NET 2.0 in person to realize how much easier it will be to develop web UI. 

ADO.NET: Gains better debugging, built in XQuery capabilities and object persistence using ObjectSpaces.

Enterprise Tools: "Microsoft will deliver a set of visual designers that help architects translate their requirements into Web services-based applications and components. The designers will provide modeling support for describing these applications and components, along with corresponding policy for security, protocols, and more. The designers will also enable developers to map their logical application to their physical production environment, making it easier to deploy complex Web services-based solutions."

SourceSafe Revamp: "In Whidbey, Microsoft will improve upon the Visual SourceSafe tools and offer programmers working in small teams the technology they need to manage source code as well as other files in their solution. Visual SourceSafe will be extended to offer support for Web service and Unicode projects, helping programmers more effectively meet the challenges of today's business. Further, programmers will enjoy improved performance and tighter integration between Visual SourceSafe and the Visual Studio IDE."

Some Press coverage:

http://www.atnewyork.com/news/article.php/2241651
http://www.infoworld.com/article/03/02/11/HNvistudio_1.html
http://zdnet.com.com/2100-1104-984129.html