A few days ago I noticed in a post on Scott Hansleman's blog regarding MSBuild... specifically he points to a post on Jomo Fisher's MSBUILD blog (btw: <subscribed />) that documents how you can use VS2005 to target & build v1.1 projects! I'll be honest, I haven't spent any time looking at MSBuild, and seeing 9 steps in the process to make this work, I thought to myself "great, another hack". Jomo, I apologize... his freaking rocks!
Follow the steps Jomo lists. All you are doing is creating a new MSBuild targets file (that points to v1.1), modifying your C# project file to use the custom MSBuild file you just created, test, see it break because there's a reference to a 2.0 namespace (generics), remove the 2.0 namepsace, build, run... watch it work!
In about 45 seconds I was able to run the test myself. Also shipped my exe (built from within VS2005) to someone who didn't have any 2.0 stuff on their machine to have them confirm it was running in v1.1. Very cool!