There are quite a few breaking issues with the .NET Framework 2.0 SP2 after you upgrade to the .NET Framework 3.5 SP1.
I will list down a few or follow the link from microsoft knowledge base
http://support.microsoft.com/kb/958481 there is an update to 3.5 sp1 is available with fixes http://support.microsoft.com/kb/959209
- Exchange Web services generate exceptions because of Windows Communication Foundation (WCF) issues. Each of the exceptions results in a failed request. Therefore, the Exchange service seems to be temporarily down or not working.
- When you create certain types in the runtime by using reflection as a product of deserialization, the runtime enters an infinite loop in 32-bit processes. In 64-bit processes, an out-of-memory exception occurs. The type must be a generic type that is instantiated by using a reference type. Additionally, the type must implement the ISerializable interface and contain a static field.
- After you install the .NET Framework 3.5 SP1, you receive the following exception error message when a Web site is hosted under IIS:System.Runtime.InteropServices.COMException
- AutoCommit behavior in Oracle transactions is different in the .NET Framework 2.0 SP1 from the behavior in the .NET Framework 2.0 SP2. In the .NET Framework 2.0 SP2, if an application starts a transaction, completes the transaction, and then starts a new transaction on the same connection, all the commands that are executed in the second transaction execute in auto-commit mode. The changes that are made by those commands are committed to the database even if the transaction is rolled back