The .NET Framework will run on Windows 98, 2000, XP, and 2003. In order to write code using .NET, you will need to install the .NET SDK unless you are using Windows Server 2003, which comes with the .NET Framework 1.0 and 1.1 already installed. If you are going to work through the examples in this book though, you are going to want to install the .NET Framework 2.0 — even if you are running Windows Server 2003 as the .NET Framework 2.0 is not included on this server as a default.
Also, unless you are intending to write your C# code using a text editor or some other third party developer environment, you will almost certainly also want Visual Studio 2005. The full SDK isn't needed to run managed code, but the .NET runtime is needed. You may find you need to distribute the .NET runtime with your code for the benefit of those clients who do not have it already installed.