The recent versions of Visual Studio are – in chronological order – 2005, 2008 and 2010. You can download VS Express free of charge from the Microsoft website, but this article only accounts the paid-for applications. As far as we're aware, there is virtually no difference between the free and paid-for versions at the developer level.
Reasons to Choose VS 2005 (or higher)
Visual Studio has not really changed in functionality since VS 2005. All of the familiar windows have not changed: Solution Explorer, toolbox, etc, and the coding and development environment would look familiar to any user of VS 2008 or 2010. So if you already have a license to use VS 2005 and do not spend too much time developing applications, stick with VS 2005.
Reasons to Choose VS 2008 (or higher)
Notwithstanding the comments above, there are two very good reasons to upgrade to Visual Studio 2008. The first one is that that includes support for the LINQ database language and for AJAX, so if you use either of these development tools you'll need to upgrade to at least VS 2008. The second reason to upgrade is that VS 2008 includes much better autocompletion, which makes a big difference if you spend most of your working hours coding.
Here's how it works. Supposing you have declared a variable called myShinyVariable and you want to assign a value to it. In VS 2005 you would have to press CTRL + SPACEBAR to bring up the name of the variable in Intellisense. In VS 2008 and above, just start typing myS and the variable name will automatically appear. This feature gets addictive!
Reasons to Choose VS 2010
Although Visual Studio 2010 contains a lot of nice features for the serious developer, we do not think the average person will benefit too much from the upgrade. The one unmissable feature is that – at last – you can now zoom in and out by holding down the CTRL key and rotating a mouse wheel.
There is one reason NOT to upgrade. In VS 2010, when you click on any variable, property, method, object or whatever, Visual Studio will highlight all instances of it through your code. Although this should be a good feature, we find it irritating (and will turn it off when we find out how).
If you're just buying Visual Studio for the first time, it makes sense to go for the latest version; however, if you're stuck with version 2008, you're not missing a great deal. Visual Studio 2005 programmers should upgrade if they want to use AJAX within their websites or if they want to speed up their typing.