In case you didn't see this elsewhere, if you're an MSDN subscriber you can download Visual Studio 2008 right away. And .NET 3.5 of course. All very cool.
While there are a whole host of new features (and the Moth's blog is a great place to read about some of these, for example this link) the three that stand out for me are:
Other people will, I'm sure, have a different set of favourite features. So don't flame me if I've failed to mention something that you think should have been in my top 3! :-)
For those of you developing on Windows Live, don't forget to get hold of the extensions to VS 2008 that make life easier for you.