Recently I was involved in a .NET 1.1 to .NET 2.0 migration. This migration was needed for us to switch over to TFS. Things went pretty smoothly but I've noticed an issue appear twice that I thought I'd share.
Some of our thirdparty assemblies ( which we don't have source to and can't recompile ) were written in VS2003 have have dependencies on MSVCR71.DLL. When you migrate over to .NET 2.0 your application will break.
The reason is the .NET 1.1 Framework ships MSVCR71.DLL in the [WindowsFolder]Microsoft.NET\Framework\v1.1.4322 folder and .NET 2.0 does not. After doing a lot of searching, it almost seems like a mistake that the .NET 1.1 framework ever shipped this file in the first place.
The problem comes when you've not identified this dependency and you switch over to .NET 2.0. Now that this file is not available at runtime you'll have a crash. A quick profiling with Filemon reveals the problem right away. At this point you add msvcr71.dll prereq package and/or private assembly to your install and your back in business.