Is VS 2005 still supported with the release of CMS R2, or is only VS 2008 supported from now on in a development environment?
You can still develop with VS 2005, but the EPiServer Visual Studio integration is only for VS 2008. Which means you won't get the "Create new Template", "Create new plug-in" support etc. in Visual Studio.
Development is still the same, just less help from VS in place.