The .NET Framework is a set of software tools that provides everything you need to run programs developed using Microsoft's .NET technology. This includes runtime engines, memory management tools, support for ASP.NET applications, and a whole lot more.
Programs written with Microsoft's Visual Studio 2010 products (which are already available in beta versions) will require the .NET Framework version 4, which is packed with new features.
One major improvement comes in the addition of Parallel Extensions. This makes it easier for programmers to create multiple loops that are all running at the same time, so taking better advantage of multicore processors and making a real difference to application performance.
Updates to the Windows Presentation Foundation (WPF) add many useful interface features, including support for Windows 7 multi-touch, ribbon controls and taskbar extensibility.
And smaller underlying tweaks enhance the clarity of text, and deliver more efficient memory management, as well as providing a host of performance and scalability improvements across the board.
The .NET Framework 4 can be installed alongside earlier Framework versions. The good news is that means it won't break older applications, as they'll continue to use previous Framework versions as normal. The bad news is these older apps won't benefit from the new features, either - a program needs to be specifically written for .NET Framework 4 to take advantage of it.