builder.com have a nice article about dotnet 1.0 .1.1 compatibility issues.
Because there are now two versions of the .NET Framework out there (there will be three by 2005), .NET developers should be concerned with making sure their applications use the proper version of the Framework at runtime. Most of the time, Web applications compiled with VS.NET 2002 will run on 1.1-enabled Web servers without having to make any changes at all. Microsoft did an outstanding job ensuring that there were as few code-breaking changes between 1.0 and 1.1 as possible.
Basic .NET: Framework compatibility issues
gotdotnet: Compatibility Considerations and Version Changes