Several of my ISV have come back to me with queries around the install order of these two betas. The preferred order is to install SQL Server 2005 Beta 2 first which includes a slightly later build (40607.42 vs 40607.16) of the .NET Framework. Then install VS.NET.
If you try to install SQL Server Beta 2 on a machine that already has Visual Studio.NET Beta 1 installed you will get a dialogue asking you to deinstall the .NET Framework. Just go to Add/Remove Programs and deinstall the .NET Framework. There is no need to deinstall Visual Studio 2005 itself. After that, you should be able to install SQl Server which copies the newer version of the Framework to the disk.