There is some good information here but corrections/clarifications that need to be made -
Item #1) Reporting Services is NOT a requirement to run the SQL Server Upgrade Advisor!
a. The location where you install SQL Server Upgrade Advisor depends on what you will be analyzing. Upgrade Advisor supports remote analysis of all supported components except Reporting Services. If you are scanning instances of Reporting Services, you must install Upgrade Advisor on the report server.
b. If you are not scanning instances of Reporting Services, you can install Upgrade Advisor on any computer that can connect to your instance of SQL Server, and that meets the Upgrade Advisor prerequisites.
Additional information - http://msdn.microsoft.com/en-us/library/ms144256.aspx
Item #3) Visual Studio 2008 - SP1 required for any v3.5 .NET components - NOT TRUE!
Visual Studio Sp1 is only required if you have Visual Studio installed and you plan on using Visual Studio after you upgrade to SQL Server 2008. If you don't plan on using it, then, technically, you don't have to upgrade it. If you have not installed Visual Studio 2008 RTM but are getting the error that VS SP1 is required, it is because Visual Studio 2008 Shell (integrated mode) is installed on your system but not at the SP1 level. This is probably because it was left over from a SQL Server 2008 CTP installation.
The binaries needed from VS 2008 SP1 are not related to the .Net Framework 3.5 SP1 update. SQL Server 2008 does require the .Net Framework 3.5 SP1 update but for different reasons. SQL Server 2008 setup will install the released version of .Net Framework 3.5 SP1 if it detects it is not already installed. This is one of the first things SQL Server 2008 setup does when executed. Even if you have the .Net Framework 3.5 SP1 Beta, SQL Server 2008 will update it to the RTM version of .Net Framework 3.5 SP1.
See this article for more information - http://blogs.msdn.com/joaol/archive/2008/08/29/sql-server-2008-visual-studio-2008-sp1-and-net-framework-3-5-sp1-explained.aspx
Finally, to answer the post by SSCrazy - yes, the SQL Server 2008 workstation tools are backwards compatible with SQL Server 2000 & 2005... of course, with limited functionality depending on the versions and features supported on the version you're connecting to.