Active Directory authentication in ASP is a method used when you want to have Active Directory control not only over which clients login into a domain, but, which global resources from it are accessed as well, namely, Web pages with server Access. You can use pages programmed in ASP Net to first authenticate against the Domain Controller before any information is displayed.
ASP Net Active Directory authentication is a very practical mean for when you have computers that are not part of a specific domain, but you want them to be able to access a database that's stored behind a Domain Controller. Or in other perspective, they may be part of one domain, but the database is in another Domain Controller, with its own Active Directory, which requires special credentials. This allow users to have access to that specific data by using unique logins and without the need of joining that given domain.
One of the many benefits of using ASP Net forms authentication with Active Directory, is that it's automatically cross-platform, as most browsers out there in the market are capable of loading ASP Net pages. This removes any problems of having Linux or Mac machines not being able to work with a specific server in a Active Directory setting, since the webpage will remote all processing to the server, the clients will only see the final data as a common web page.
ASP Net 2.0 Active Directory authentication works rather similarly with ASP Net 3.5 Active Directory authentication, although the difference comes along with what kind of forms and tools may be used page wise. For full reference on the differences pertaining to each version you should consult the appropriate support while constructing the pages. Attempting to use 3.5 version code on a 2.0 Net framework will obviously not work.
This brings to the point that you must analyze what your page requires. Sometimes it is possible to achieve certain means without relying strictly on new applets from the 3.5 version. With some thought, you are still able to use 2.0 applets for the Active Directory authentication from ASP Net which allow end users to use 2.0 Net framework which is far more compatible.
When unable to restrain yourself to programming the page with 2.0 ASP Net, then you should vividly all users to access the authentication page with the proper framework installed or there may be errors created, both on their side or server side, depending on the applets used. When page development is practiced with poor enough care, the damage may be critical and bring the actual Domain Controller down as if an exploit had been abused.