Great news: 

Visual Studio 2008 and .NET 3.5 Beta 2 have been Released is available for download at http://msdn2.microsoft.com/en-us/vstudio/aa700831.aspx.

Bad news: (this great explanation of current version status has been sent by http://www.codeproject.com/)

In case you are confused as to what version is what, here's a quick, simple rundown: Visual Studio 2008 (aka 'Orcas', aka version 9.0) contains C# version 3.0 and VB.NET version 9.0. These run on version 3.0 of the CLR and will target version 3.5 of the .NET Framework. Visual Studio 2008 will also allow you to target the 2.0 version of the CLR and 3.0 of the framework (which runs on 2.0 of the CLR, not 3.0 of the CLR).

Got it? Great!

Remember that this is beta software (regardless of what Marketing may say) so download, install and use at your own risk.

M$ Marketing Guys, what are you doining?! I have no chance to explain this to any portfolio manager. Shit!