In the specific case of the C# 3 compiler, there isn't a problem so long as you don't use any assemblies or types which aren't in .NET 2.0 - the IL is the same (as opposed to targeting 1.1, for instance).
In addition to this, you can use /noconfig /nostdlib and then explicitly reference the .NET 2.0 assemblies (in c:\Windows\Microsoft.NET\Framework\v2.0.50727 for example). It looks like the /lib command line option can make this slightly easier by letting you specify a directory to look in for references, but I haven't tried that myself.