I noticed this blog entry providing an example of using LINQ to read an RSS feed. Having come across LINQ before, and being curious, I had to give it a try.
You need the .NET 3.5 framework, currently at beta 2, which installed nicely.
I don't foresee the latest framework causing any issues with PowerShell, as I believe 3.5 is similar to 3.0, and is only seen as extensions added to the 2.0 framework for the most part.
3.5 does seem to come with new C# and VB.NET compilers though.