Multi-version targetting is a new feature in VS 2008 that makes it easier to target applications to different NET Framework versions from a single IDE. Of course this does not include 1.1. You choose the version you want to target while creating a project. Notice the top right drop-down in the next figure which allows you to choose the version. The IDE and all related code will be applicable to that version. In this new project window targeting the 2.0 version you see the templates for VS projects applicable to this version.
When you choose 3.0 the window changes as shown in the next figure.
You see lot more templates and the WPF and WCF related templates.
All aspects of the IDE to support the chosen version will be active.
This one is for the 'Data' in version 2.0
This one is for Data in version 3.5
For developers this makes it easier to handle user complaints about version problems.
VS2008 Professional Edition with Visual Basic as the chosen language were used.