I was sad when "Indigo" and "Avalon" went away. It'd be great if we'd have a pool of cool legal-approved code-names for which we own the trademark rights and which we could stick to. Think Delphi or Safari. "Indigo" was cool insofar as it was very handy to refer to the technology set, but was removed far enough from the specifics that it doesn't create a sharply defined, product-like island within the larger managed-code landscape or has legacy connotations like "ADO.NET". Also, my talks these days could be 10 minutes shorter if I could refer to Indigo instead of "Windows Communications Foundation". Likewise, my job title wouldn't have to have a line wrap on the business card of I ever spelled it out in full.
However, when I learned about the WinFX name going away (several weeks before the public announcement) and the new "Vista Wave" technologies (WPF/WF/WCF/WCS) being rolled up under the .NET Framework brand, I was quite happy. Ever since it became clear in 2004 that the grand plan to put a complete, covers-all-and-everything managed API on top (and on quite a bit of the bottom) of everything Windows would have to wait until siginificantly after Vista and that therefore the Win16>Win32>WinFX continuity would not tell the true story, that name made only limited sense to stick to. The .NET Framework is the #1 choice for business applications and a well established brand. People refer to themselves as being "dotnet" developers. But even though the .NET Framework covers a lot of ground and "Indigo", "Avalon", "InfoCard", and "Workflow" are overwhelmingly (or exclusively) managed-code based, there are still quite a few things in Windows Vista that still require using P/Invoke or COM/Interop from managed code or unmanaged code outright. That's not a problem. Something has to manage the managed code and there's no urgent need to rewrite entire subsystems to managed code if you only want to add or revise features.
So now all the new stuff is now part of the .NET Framework. That is a good, good, good change. This says what it all is.
Admittedly confusing is the "3.0" bit. What we'll ship is a Framework 3.0 that rides on top of the 2.0 CLR and includes the 2.0 versions of the Base-Class Library, Windows Forms, and ASP.NET. It doesn't include the formerly-announced-as-to-be-part-of-3.0 technologies like VB9 (there you have the version number consistency flying out the window outright), C# 3.0, and LINQ. Personally, I think that it might be a tiny bit less confusing if the Framework had a version-number neutral name such as ".NET Framework 2006" which would allow doing what we do now with less potential for confusion, but only a tiny bit. Certainly not enough to stage a war over "2006" vs. "3.0".
It's a matter of project management reality and also one of platform predictability that the ASP.NET, or Windows Forms teams do not and should not ship a full major-version revision of their bits every year. They shipped Whidbey (2.0) in late 2005 and hence it's healthy for them to have boarded the scheduled-to-arrive-in-2007 boat heading to Orcas. We (the "WinFX" teams) subscribed to the Vista ship docking later this year and we bring great innovation which will be preinstalled on every copy of it. LINQ as well as VB9 and C# incorporating it on a language-level are very obviously Visual Studio bound and hence they are on the Orcas ferry as well. The .NET Framework is a steadily growing development platform that spans technologies from the Developer Division, Connected Systems, Windows Server, Windows Client, SQL Server, and other groups, and my gut feeling is that it will become the norm that it will be extended off-cycle from the Developer Division's Visual Studio and CLR releases. Whenever a big ship docks in the port, may it be Office, SQL, BizTalk, Windows Server, or Windows Client, and as more and more of the still-unmanaged Win32/Win64 surface area gets wrapped, augmented or replaced by managed-code APIs over time and entirely new things are added, there might be bits that fit into and update the Framework.
So one sane way to think about the .NET Framework version number is that it merely labels the overall package and not the individual assemblies and components included within it. Up to 2.0 everything was pretty synchronized, but given the ever-increasing scale of the thing, it's good to think of that being a lucky (even if intended) coindicence of scheduling. This surely isn't the first time that packages were versioned independently of their components. There was and is no reason for the ASP.NET team to gratuitously recompile their existing bits with a new version number just to have the GAC look pretty and to create the illusion that everything is new - and to break Visual Studio compatibility in the process.
Of course, once we cover 100% of the Win32 surface area, we can rename it all into WinFX again (just kidding)
[All the usual "personal opinion" disclaimers apply to this post]
Update: Removed reference to "Win64".