Our company uses .NET 2.0 to develop server application which is installed at a number of large customers. We still use 2.0 only because it is installed on all customer servers by default.
For us, as developers, this is sometimes total madness, especially for those who migrated from .NET 3.5. We can't use most powerful language and framework features we got used to. Lack of WCF and LINQ really sucks.
How to convince our clients to migrate to .net 3.5? As I understand, the most important problem here is downloading and installing the monstrous .NET runtime (250M?) which is simply impossible.