So you want to use the .NET 3.5 framework in a MOSS site? Let Visual Studio do the work for you…
- Start Visual Studio 2008 and create a new ASP.NET Web Application Project, targeting the .NET Framework 2.0
- Copy the web.config of your SharePoint 2007 site, into the Web Application project in Visual Studio.
- Open the Project Properties in Visual Studio
- Select .NET Framework 3.5 in the Target Framework dropdown
- Now copy the web.config from the Visual Studio Project back to SharePoint.
Gotta love it.