no .NET Framework is installed automatically by WU but this is listed as an optional component.
Windows XP SP2 ships with .NET Framework 1.1 as does Windows Server 2003. Windows Vista ships with .NET 3.0 as standard so currently its your call on what you would like to do. I would still dev apps in .NET 2.0 until say another 4 months then move onto .NET 3.0
at the end of the day if someone runs your app and it requires a .NET Framework version, then its best to have it installed with your app than to "bypass" or ignore your application. At some stage, .NET will have to be installed on the computer to run other .NET apps too!
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