We had no problems updating all our applications from 2.0 to 3.5
I doubt that you will have problems because .NET 3.0 and 3.5 are βadditiveβ versions, which means that the basic functions of .NET 2.0 remain unchanged, they just add functions.
This brief article explains this a bit more clearly: http://www.4guysfromrolla.com/articles/112107-1.aspx
As a side note, we also had no problems with 2.0 right up to 4.0. Microsoft is very good at making updates painless.
I would like to throw a disclaimer - if you use third-party components, I can not vouch for how easily they survive in the upgrade process, but taking into account the additive nature of releases through 3.5. I think you will be fine.
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