Normally this would be an easy decision (the answer being "of course"). However, my job does not have its own copy of Visual Studio, and anything I develop will be done on my personal laptop that has an MSDN subscription (this is already cleared with the company). The company is too cheap to pay for Visual Studio, however I have an unused copy of Visual Studio 2005 Standard which I got for free (some promotion from Microsoft a couple of years back if you viewed 3 webcasts) that I could install on my actual work computer (that I don't use anymore since I bring my own laptop to the office).
If I use .NET 3.5 then when I leave (because, as I've made mention in the past this company really is a dead-end for my career and I need to move on if I ever want to improve) whoever they get to take my place won't have a real IDE to use at all for anything; I could install Web Developer 2008 Express (I'm doing web applications) and they could use that to open and modify the files I've created in VS on my laptop, but I'm not sure if there are any "quirks" of VWD Express that would make some projects unreadable or unusable; even though the company doesn't deserve it I'm trying to be the "good guy" and not screw them over if I can avoid it.
I really like some features of .NET 3.5, especially ASP.NET MVC and LINQ, but I could get by with their applications using an ORM like NHibernate or SubSonic instead of LINQ to SQL and not use MVC at all; also their current systems are Windows Server 2003 and SQL Server 2005 so are more "aligned" with .NET 2.0, I guess you could say - aligned isn't the right term but I think everyone can understand what I'm trying to convey - they would work seamlessly with .NET 2.0 while there are some features of .NET 3.5 that work better with the 2008 versions.
Basically which route would you take in a situation like this? Remember I have no choice but to stay here for right now so even though "run away screaming" would be the best course of action, that's not feasible at the moment. However I also know that they won't ever upgrade those systems or buy Visual Studio (hence why I have to use my own copy and write code on my own laptop)
EDIT: The current site is all Classic ASP, so there are no upgrade issues to worry about; I'm starting from a clean slate with it. I could get by using .NET 2.0 but I'm tempted to use .NET 3.5 for selfish reasons; that way when I leave this place I'll be familiar with .NET 3.5 and the newest stuff.