Multitargeting is targeting specific versions of the .NET
Framework, in the Visual Studio 2008 Betas and later you can target the 2.0, 3.0 and 3.5
frameworks for development.
So, why multitarget? You may have to
support existing code bases that were previously written using Visual Studio
2005 targeting the .NET 2.0 Framework with AJAX 1.0 and want to upgrade just
your Visual Studio IDE to take advantage of new feature sets. Or, you may have directives from management,
company or client policy to keep creating on the 2.0 codebase until further
notice. Whatever the reason, you can
target the version that’s right for your project.
How to target different framework versions:
You can select the framework version you want
when you start a new project or website. The project type doesn't matter, multitargeting is available for Winforms, ASP.NET or any type of project template you decide to use.

Once you've started your project, if version requirements change at any time, you can adjust easily. You can target different versions by visiting the project
properties dialog box and selecting the Build tab (left side). The versions available to target will display on the right (circled below).

And that's all there is, it's easy to try out different .NET framework versions or switch versions using Visual Studio 2008.