Earlier this week, we shipped Visual Studio 2008 and the .NET Framework 3.5. I've been on the Visual Studio Deployment team since the middle of VS 2005 so I've seen a lot and been through a lot with this division. Visual Studio 2008 has definately been a fun ride and we shipped almost exactly 2 years from the VS 2005 ship date. The product started with an MQ milestone (our milestone of quality) where we fixed as many bugs as possible before moving towards product development. A ton of new features have been added to VS 2008 including LINQ, a designer for WPF, more Tools for Office templates, more robust install experience, more mobile device development support, and a lot more.
The Express SKUs are still free so go ahead and download them and give them a try. The trial editions are also available for VS Pro and VS Team Suite. You can download them from: http://msdn2.microsoft.com/en-us/vstudio/default.aspx
Enjoy the new development environment and keep building great apps!