+2  A: 

Have you installed Service Pack 1 for Vistual studio 2008?

fretje
Well I already had it installed as it came with my version of VS2008. But I ran through it anyway and it was there! Thanks fretje.
JimDel
+2  A: 

The installer for .NET Framework 3.5 SP1 is not included in the VS2008 SP1 installer due to size restrictions.

For a workaround on how to actually include it in your setup project, refer to this page: http://blogs.msdn.com/vsto/archive/2008/11/18/how-to-include-net-framework-3-5-sp1-with-your-installer.aspx

julio.g
Thanks Julio, that web site was awesome. It answered what would have been my next question. Which was how to include the .NET framework on my actual install media. Thanks!
JimDel
+1  A: 

Just to add my two cents. After installing SP1 for Studio 2008 I still don't have .NET Framework 3.5 Client Profile available as prerequisite.

But If I select .net client profile and .net framework 3.5 sp1 then .NET Framework 3.5 Client Profile gets installed.

I suspect this is a glitch in studio 2008, but apparently it works.

Vnuk