Arash Ghanaie previously published an excellent article on how to develop callouts using VS2005. A problem when doing this was however, that if you were using the common way of accessing the crm webservice, by adding a web reference, the program wouldn’t compile since the web reference used .NET 2.0. The solution is to create a file containing all the references to the web service using the program wsdl.exe, and using the .NET 1.1 version of it.
Please check the link for further info on how it is done! (click the heading!)
CRM and SharePoint Consultant