It's the latest word that MS are selling :-)
Seriously, it's a load of different things thrown into the same melting pot:
First off, there's C# ("C sharp"). A guy at my previous company developed a couple of apps in it, seems to work fairly well, fair enough. It appears to compile quite well, as in small.
The more significant bit of .net is that it's an interface for developers to develop in quite a few more languages for MS platforms, which isn't that bad an idea really, but it's not worth getting seriously excited about. IIRC, Python, SOAP, and a few others are the more significant names listed. From what I've seen of that part of .net, plugging into IIS, is that it's MS's idea to have people install their .net infrastructure to support a load of scriptable languages plugging into IIS instead of say installing ActivePerl, and a load of third-party bits of software. MS's usual tactic of forcing out as many software writers for Windows as possible.
The more bizarre bit is that MS are labelling world+dog MS products with .net, particularly Office. I'm not sure why. I can't see how what I've explained for IIS would be particularly useful for MSOffice.
From what I've seen of .net, it's worth paying about as much attention to as most people pay to Active Desktop nowadays. Once Active Desktop was going to turn the whole world around, now it's just another bit of bloat making the desktop slower.
I'm not claiming to have seriously and looked in-depth into .net, and I'm sure other people will be able to correct or add to what I've written, but I looked into it from my Windows sysadmin [the kind that does have a brain, apparently the minority :-)] point of view, looking to see if there's anything potentially worth paying much attention to, but not really, IMO.
.net is an anti-Sun project, not an anti Java project (yes, I know, Sun made Java). Sun's equivalent is called "Sun ONE" IIRC.