.net Framework 3.5 is now coming up as a Critical Update.
I have just taken the plunge and installed .net Framework 3.5 with only one minor problem.
When the computer restarted, I logged in, it could not find my profile and logged me in with a Temp profile.
I then shutdown the computer and did a cold boot (power on start up). I then logged in and got my normal profile.
Hoster works exactly the same under 3.0 and 3.5.
This was done on XP Pro. I cannot vouch for Vista.