Microsoft just released Visual Studio 2008 and the .NET Framework 3.5.

Download .NET Framework 3.5

To develop applications for the .NET Framework 3.5, download SharpDevelop 3.0 from the build server.

Note that SharpDevelop 3.0 are not release quality builds, especially the integrated debugger is very unstable. As currently no one is working on the debugger (hint: you can help!), I disabled it in SharpDevelop 3.0.0.2745 so that people trying SharpDevelop 3.0 do not immediately get exceptions when they try run their programs. To re-enable the debugger, open C:\Program Files\SharpDevelop\3.0\AddIns\AddIns\Misc\Debugger\Debugger.AddIn.addin in a text editor and remove the <DisableAddIn .../> node.