The <RequiredTargetFramework>
element was already present in your 3.5 project. It's associated with the assembly <Reference>
and only present on assemblies that are not available in .NET 2.0
I don't buy much stock in the single mention of it in MSDN, I don't see how batch building has anything to do assembly references. Nor is it used in any of the 3.5 MSBuild .target files. I think the IDE simply uses it to put the warning icon next to the reference in the References node when you change the Target Framework to a version less than what's needed to support the assembly.
There are other elements like this in a project file that don't affect MSBuild but have an effect in the IDE. Like <SubType>
and <DependentUpon>
in the <Compile>
element.