It is likely that most organizations will need to run ASP.NET 1.1, 2.0, and 3.5 applications side by side for a few years. In many cases, if corporate developers integrate custom internal ASP.NET sites with web-based applications from third-party vendors, they may need to wait for the next upgrade from their vendors before moving a web application over to ASP.NET 2.0 or ASP.NET 3.5. It is worth mentioning that ASP.NET 3.5 uses the same runtime as that of ASP.NET 2.0. Upgrading an application from ASP.NET 2.0 to ASP.NET 3.5 requires no major changes at all, contrary to the case of upgrading an ASP.NET 1.1 to either ASP.NET 2.0 or ASP.NET 3.5. An application configured with .NET Framework 3.5 inside Visual Studio 2008 functions the same as an application running with .NET Framework 2.0 in Visual Studio 2008. However, the difference is in the added features that are part of ASP.NET 3.5 only (AJAX, LINQ, and so on).
The bottom line here is that ASP.NET 3.5 and ASP.NET 2.0 applications share the same application pool on IIS 7.0 since the runtime is the same and, hence, whatever applies on ASP.NET 2.0 applies also on ASP.NET 3.5.
You can accomplish both of the following scenarios when running in mixed environments:
You can issue forms authentication tickets from ASP.NET 2.0 and ASP.NET 3.5 applications and the tickets will work properly when they are sent to an ASP.NET 1.1 application.
You can issue forms authentication tickets from ASP.NET ...