This is not a question I hear often from folks who develop on the Microsoft platform. (.NET is often what they eat, breathe, and sleep on.) However, it's very common for me to hear this from developers who aren't familiar with Microsoft's development platform. This includes Java folks, PHP folks, etc.
Sometimes it's hard to forget that while I've been using .NET since the 2000/2001 timeframe, not everyone else has been. There is a stereotype that us Microsoft folks live in a bubble. I make it a point to try to stay out of that bubble as often as I can. And when I do, I'm always surprised at how folks don't know what .NET is. Yeah, they've heard about .NET before, but in name only.
Doug Turnure, my colleague down in Atlanta, has written a post on What is the .NET Framework on his blog. If you're a developer that doesn't develop on the Microsoft platform, check it out for a good summary.