Recently on a VB mailing list, there were talks about Visual Studio 2005's lack of support for earlier versions of the .NET Framework (.NET FX 1.0 and 1.1).
This morning I came across a relevant blog post "Why Visual Studio targets only one version of the .NET Framework" from the Visual Studio Tech Lead explaining why VS 2005 as an IDE only supports .NET FX 2.0. Good read.