I would never discourage anyone from upgrading to VS2008 and .Net 3.5, however, I would also never encourage anyone to use WCF on the client to communicate with an HTTP endpoint.
I would highly recommend that you look at the HTTP client library that is available in the WCF REST Starter Kit. This library however, despite its name, does not require WCF or .NET 3.5. To use the Microsoft.Http.HttpClient you only need .net 2.0. You only need 3.5 if you use the Microsoft.Http.Extensions DLL which has helper methods to use DataContract serializer and Syndication Feeds.
In my opinion, do not get sucked into doing client side DataContracts for remote services, it is really the tail wagging the dog and you will suffer in the long term. There are a few examples of questions here on Stack Overflow of people struggling with trying to get the DataContracts to produce the exact XML that a service requires.