I notice in the designer you can target up to .NET 3.0 ... I have installed VS 2008 b2 and was curious if it would be possible to target .NET 3.5 for a .NET 3.5 target in VS 2008 b2? Of course, I supposed the designer would need to be aware if .NET 3.5 was installed.

There aren't any templates for .net 3.5, so you should pick 3.0, that code will work fine on b2 of orcas. We don't support betas from any company in general.