Visual Studio Editions
Visual Studio .NET 2002 was the first .NET development product. It ships with the .NET Framework 1.0.
Visual Studio .NET 2003 is the second version which ships with the .NET Framework 1.1.
Windows Server 2003 ships with the .NET Framework 1.1 already installed on the operating system.
Visual Studio 2005 codenamed "Whidbey" is third version which ships C# version 2. It ships with Office developer tools, and enterprise development and life-cycle support.
Visual Studio Express is also part of the Visual Studio 2005 umbrella. These are basically lightweight, scaled-down versions of Visual Studio 2005. They will be free until November 2006.
Visual Studio Orcas will provide tools for supporting Windows Longhorn. It will take advantage of the new user interface technologies ("Avalon"), storage services ("WinFS"), and web service technologies ("Indigo").
Team Edition ($$$$ full) which contains almost everything Microsoft creates from SQL Server, Visio, SourceSafe, BizTalk Server, Commerce Server, Exchange Server, and so on.
Professional ($799 full) doesn't include any of the servers listed above nor SourceSafe. It does however include SQL Server 2005 Developer edition.
Standard editions ($299 full) contains all languages (C#, VB.NET, etc). It doesn't contain all the bells and whistles but allows you to evaluate the environment and the .NET technologies. For example, Standard only supports local debugging and no 64-bit support nor SQL Server 2005 integration.
Express editions (Free until Nov '06, ~$49 afterwards) contain a single language and a single technology (ASP.NET and Windows development are separated).
2002 versus 2003
The difference between Visual Studio .NET 2002 and 2003 is that 2003 has support for compact devices. It has the Compact Framework technology for writing applications that run on cell phones, PDAs, and so forth. It also includes an emulator so you can try out your applications.
2003 versus 2005
There is no question about it. 2005 rocks! They have added so many new features that it's the same kind of change as from Visual Studio 6.0 to Visual Studio 7.0 (2002). It's a major change that includes C# version 2.
Microsoft lists the minimum system requirements for running Visual Studio .NET as a PC with a Pentium II 450-MHz processor with 160 MB of RAM for use on Windows XP.
My personal requirements for running Visual Studio .NET reasonably is Pentium 1 GHz processor with 512 MB of RAM (ideally 1 Gig of RAM).