The main difference is 2005 using frmework2.0 and 2008 using 3.5 No major difference in 2008. Some improvements in 2005 only. The main difference is in ASP.net. Ajax came in 2008. Also split window for ASP.net HTML view
In Visual Basic 2008 embedded with some extra features VS2005 - uses & supports the 2.0 version of the Framework. VS2008 supports 2.0, 3.0 & 3.5 versions....