A limitation many have found trying to run applications or code located on a network share is now removed.
Not sure yet if it is enough to just have 3.5 SP1 installed to have it working though or if the code needs to be recompiled for it to work.
Update via Brad Adams:
“No, an existing application does not have to be recompiled or changed in any way to take advantage of this. Your current 2.0 Applications will just work, you don't have to target anything new in 3.5..”
“The framework is now better optimized for startup. … What this means to you: Even your JIT code starts faster!”