Request Suggestion: ASP=>ASP.NET 3.5 or ASP=>ASP.NET 2.0 ->ASP.NET 3.5 (in 5 years)

Hi there,
 I have a few questions:
My company has about 40 mid-sized application written in class asp. We plan to upgrade to ASP.NET since Microsoft will no longer support ASP
in three years. As of today, most of our servers are running ASP.NET 2.0. Here are a few of the questions:
1.) Is ASP.NET 3.5 or ASP.NET 3.0 stable enough to be put to production? 
2.) Can IIS run different versions of ASP.NET? 
3.) For new applications, would you guys develop it in ASP.NET 2.0 or the latest version?
4.) Any known problems?

 I love the the MVC and ORM/LINQ about ASP.NET 3.5; however, I'm satisfied with ASP.NET 2.0 + custom MVC + NHibernate.
Steven Ho 



...