So the official name for Visual Studio "Orcas" is Visual Studio 2008 - which is not as nice as "Silverlight", but it does give Microsoft a year of leeway to delay release. One of the biggest pain points we've had is migrating to Visual Studio 2005 from Visual Studio 2003. We wanted the nice new IDE, but that meant we had to upgrade all of our projects to .NET 2.0 to take advantage of the new IDE features. This was complicated even more since the project files completely changed to MSBuild files, so migration was a such a huge pain, we didn't ever want to do it again.
In Visual Studio 2008, Microsoft introduced "Multi-Targeting", which allows the developer to select which version of the .NET Framework to target (2.0, 3.0, or 3.5). Check out Scott Guthrie's blog entry on Multi Targeting for more details:
Some might see this as just a nice thing MS did to help developers out. Since migration to VS 2005 left such a bad taste in so many developers mouths, I think this feature was absolutely necessary to provide to remove that barrier of entry for VS 2008.