This shows up when you press F1 in the Framework and References dialog:
By default for new projects, the targeted framework is set to .NET Framework 4. The IDE does not support modifying the targeted framework, but you can change it manually.
In the project file (.vcxproj), the default targeted framework is represented by the v4.0 property element. To change the targeted framework, unload the project, use a text editor to open the project file, and then change the value of the property element from v4.0 to another version that is installed on your server. For example, if you specify v3.5, which represents the .NET Framework v3.5, Visual Studio 2008 SP1 must be installed. Save and close the file, reload the project, and verify that the targeted framework is displayed in the property page.
That's not terribly accurate on converted projects, you'll have to add the <TargetFrameworkVersion>
element yourself. Put it in the PropertyGroup labeled "Globals":
<PropertyGroup Label="Globals">
<TargetFrameworkVersion>v3.5</TargetFrameworkVersion>
<others...>
</PropertyGroup>