LINQ is part of the .NET 3.5 Framework Library. This version of .NET (like the 3.0 version) don't change the CLR runtime, but only adds new assemblies to the .NET 2.0 Framework runtime. The deployment of a .NET 3.5 (or LINQ) program only requires the deployment of a small set of assemblies and, most important, doesn't change existing .NET 2.0 runtime components. This grants that installing a .NET 3.0 or .NET 3.5 library shouldn't break existing programs and don't require compatibility check to newer runtime versions of existing programs.
This is true until current Beta 2 and we don't have any information about a change in this model. May be that a future .NET version (4.0?) will upgrade also the runtime, but this is only a speculation about the future :-)
From a practical point of view: if you install Visual Studio 2008 Beta 1 (or Beta 2), create a C# application, remove references to System.Core and System.Xml.Linq (two assemblies that are part of .NET 3.5 extensions) and compile, you obtain a program that can be run on a .NET 2.0 machine where .NET 3.5 is not installed.
Please note that early CTP of LINQ didn't require the deployment of .NET 3.5 assemblies, since LINQ assemblies could be deployed locally (privately) to the application on a .NET 2.0 provided machine. May be this is still possible with current beta (but I suspect this doesn't work anymore), however I wouldn't suggest to do it.
I hope it is more clear now. We had several space constraint on the book (we had to limit the number of pages) and sometime we needed to be very short in some descriptions.
Marco Russo
http://introducinqlinq.com