I've been told that SQL 2005 doesn't support CLR functions created with DotNet Framework 4.0 - I haven't tested it cos When attempting to create a new SQL 2005 CLR project using Visual Studio 2010, I found myself at a loss to work out how to create a .NET Framework 3.0 project ie using the new and improved multi-targeting feature.
The only option available to me in the 'New Project' dialog box was a 4.0 Framework. Plus a handy 'More Frameworks" option which took me to the download page for various dotnet frameworks. I already had 3.0, 2.0 and 1.1 installed on the machine so the need to redownload and reinstall them seemed irritatingly redundant.
So after much googling, I found the solution.
You have to install .NET Framework 3.5.
Ummm... that's it.
Close VS, install 3.5 framework, open VS and wacko!
Contrary to the installer instructions, I did not have to reboot.