The following link talks about performance improvements in the SP1 of .NET 3.5 http://blogs.msdn.com/dinesh.kulkarni/archive/2008/08/10/net-fx-3-5-sp1-two-perf-improvements-linq-to-objects-and-linq-to-sql.aspx

This link talks about a couple of breaking changes in the SP1 http://blogs.msdn.com/ed_maurer/archive/2008/02/16/breaking-change-in-linq-queries-using-explicitly-typed-range-variables.aspx