I got this error in my WSS site that I am trying to upgrade to ASP.NET 2.0.

This Windows SharePoint Services virtual server has not been configured for use with ASP.NET 2.0.50727.42. For more information, please refer to Knowledge Base article 894903 at http://go.microsoft.com/fwlink/?LinkId=42660.

The resulting link is indeed very informative about what changes are required in the web.config to support the new security features of ASP.NET 2.0.

However, the stsadm -upgrade syntax that is mentioned in the article didn’t work for me.  I made the changes to the web.config file manually and everything works fine now.