If you have both .NET 1.1 and .NET 2.0, your 1.1 applications will use the 1.1 runtime.
If you have only .NET 3.5, your 1.1 applications will use the 2.0 runtime.
If you are both .NET 1.1 and .NET 2.0 and have both 1.1 and 2.0 applications, no problem. Each program gets its own instance of the correct runtime.
If you are both .NET 1.1 and .NET 2.0, and have a program with plugins version 1.1 and 2.0, you are screwed. There is a 50-50 chance that the program will first load the runtime 1.1, as a result of which the plugin 2.0 will fail. (Only one runtime is allowed per application.)
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