When building .NET applications for a company that mainly run 2000/XP machines, which version of Visual Studio and .NET Framework works best in this environment?
Windows 2000 only goes up to .NET 2.0 I think, so you are limited in that regard - VS 2005 and .NET 2.0 are your best options.
XP is not limited, and supports all versions - so the most recent will be the best to work on. VS 2010 and .NET 4.0 if at all possible.
Obviously it further depends on what you want to develop, what .NET or language features you want etc.