Visual Studio 2008 and .NET 3.5 SP1 was released yesterday. This is a significant update. It is much more than a typical service pack. It includes not only rolled-up fixes, but enhancements in many areas and technologies:
For the web, there is enhanced designer support and better formatting options for JavaScript.For WPF, there are improvements to the design interface as well as how you interact with the code.For SQL, there is support for SQL 2008 which was just recently RTM'd.There are WCF improvements such as the new Hosting Wizard for WCF projects.And there are VB and C# interaction improvements.
As opposed to re-listing features that have already been listed elsewhere, Scott Guthrie had a great blog entry about VS2008 SP1 as well as .NET 3.5 SP1. Keep in mind that this was the written about the BETA release so some things may have changed before final release, but it gives a great overview of what was in the BETA.