Than you so much. Its hard to believe that there are people out there who are willing to help other people. The version of Visual Studio I am using is a little cryptic to beginners like me. However I had to do the following steps: Create an empty web site, right click on the project select "Property Pages", select "build", change target framework to 2.0, select website, add new item, select web form. That worked great. If it wasn't for the reply it would have taken a lot longer to do something simple.
Too bad the file->new web site->selecting asp.net web site automatically creates project files with asp 3.5 and there isn't an option to change the target platform in that window. I realize it is not a big deal to do it the other way. Anyway I was mainly replying to say thank you.