When you install the .NET Framework (be it version 1.0, 1.1 or 2.0) on a computer, you are installing a Common Language Runtime (CLR), a set of DLLs and the ASP.NET integration with IIS if your operating system has Internet Information Services installed. These are the most important three components of the .NET Framework redistributable.
The .NET Framwork SDK also has a command-line compiler, tools, documentation and samples.