Are you sure you are asking the right question?
There is no new .NET Runtime version to target. If you have a 3.0 or 3.5 Framework your IIS will still display 2.0 as it's runtime because 3.0 and 3.5 differ only in Framework classes and compiler from a 2.0 application!
You should only see 1.X and 2.0 frameworks in your IIS configuration.
Edit: Target switching only happens when your compile your application. Because 2.0, 3.0 and 3.5 all run on the same .NET Runtime Environment 2.0 (VM).
You still need to have the additional frameworks installed because their API differs, but all run on the same intermediate language instruction set.