Hi,
Please see the notes in the README.VisualStudio.txt file in the root of the source code, and/or The .NET 4 Transition Plan.
However, my advice would be to get a different host. .NET 4 has been out for a long time and we will not support .NET 3.5 forever. Probably when .NET 4.5 ships we will drop support for .NET 3.5 and focus only on .NET 4 and 4.5.
Also there are problems under medium trust hosting with .NET 3.5 as noted at the bottom of the article Understanding the theme.skin file.
So there are many good reasons to make the move to .NET 4. I would not recommend setting up new sites under .NET 3.5 today.
Best,
Joe