Microsoft is working hard on a service pack for .NET 3.5 and visual studio 2008 and it sure does look good. For a full list of features look here: http://weblogs.asp.net/scottgu/archive/2008/05/12/visual-studio-2008-and-net-framework-3-5-service-pack-1-beta.aspx
One of the most important things to me is the fix of the WPF designer which allows the debugger to show exception helpers inside the XAML. No more checking out inner exceptions for those nasty XAML errors. 😀 This will make life a lot easier for the WPF developers among us.
One other new feature is ADO.NET entity framework. Yup, it's included complete with designer and all!
I can't wait to get my hands on the new service pack.