From a language point of view : Generics, Anonymous Delegates, Iterators, more classes in the framework.
IDE: Integrated unit testing, integrated fxcop, integrated refactoring support, better intellisense, visualisers for debugging.
Vastly improved web development: Master pages, new security controls, new navigation controls, personalisation, themes, better data base integration, vastly superior databinding capabilities, more flexible security model.
Windows development: Menu strips, tool strips, improved data grid.
Data Access: Datasets more useful, many dataset features now supported at the datatable level.
For starters.