Such a common question asked. I think the confusion of it comes because on major version updates, Microsoft has typically replaced the former version with the newer one. WIth the .NET framework, they have just added to it, betwee, 2.0, 3.0 and 3.5. Its a strange pattern MS is setting, however, it makes it great for compatibility of your apps on each new release.
Here is a blog that nicely shows it in a picture format:
