If I install framework 4 will it replace framework 3.5? I still work on many applications using framework 3.5 which I do not plan to migrate in the near future however I'd like to use framework 4 for new projects.
An install of .NET 4 will not replace .NET 3.5.
You are free to continue developing .NET 3.5 apps as well as .NET 4.0 apps on the same development machine; you may sometimes have to juggle your PATH envar, if you use msbuild, but even that isn't a problem.
You can even continue developing .NET 2.0 if you like :)
No it will remain there and wont cause any conflicts. .NET 4 And visual studio 2010 allow .NET 3.5 and Visual Studio 2008 to be ran side by side.
Not a problem. .NET 4.0 is the first version in a long time that installs side-by-side with previous versions of the framework. .NET 2.0 was previous-to-last one that supported this, installing .NET 3.0 or 3.5 would replace it. Although the term "improve it" would be more appropriate.
Installing the 4.0 framework will not overwrite or remove the previous frameworks (2.0, 3.0, 3.5 etc). .NET 4.0 will run side by side with .NET 2.0+. If you're using Visual studio 2010, you just have to make sure to choose the framework you want to work with when you start up a new project.