Brian Harry just posted this news that - Microsoft released VS .net 3.5/TFS SP1.
At a very high level, the improvements include:
Improved WPF designers
SQLServer 2008 support
ADO.NET Entity designer
Visual Basic & Visual C++ improvements (including an MFC-based Office 2007 style 'Ribbon')
Team Foundation Server improvements - detailed here
A new .NET profile for client applications that is much smaller and installs much faster
Substantial .NET performance improvements (particularly in startup time)
And much, much more...
Here are the downloads -
Visual Studio Team System 2008 Team Foundation Server Service Pack 1 -http://go.microsoft.com/fwlink/?LinkId=124829
NET Framework 3.5 Service Pack 1 - http://go.microsoft.com/fwlink/?LinkId=124150
If you have setup issues, a great first resource is Heath's blog: http://blogs.msdn.com/heaths/archive/tags/VS+2008+SP1/default.aspx
Here's a useful entry about collecting setup log information: http://blogs.msdn.com/heaths/archive/2008/05/09/visual-studio-and-net-log-collection-utility.aspx