This is an interesting move from Redmond. It should start moving people away from the hard to scale ASP platform to ASP.NET, which is on the whole a good thing as there's a much better security model in .NET (and compiled rather than interpreted code). It also starts to show the possibilities in managing and segregating your development environment. Business logic will end up being developed in Visual Studio.NET, while front end and web service code will use Web Matrix. This should help reduce costs, as VS.NET isn't the cheapest development tool around, though it is one of the most powerful
There's also the open source SharpDevelop, if you're more into application development than web front end design. This takes an interesting approach to code development, though I think I remain more of a fan of ActiveState's Komodo IDE.
(Of course, both need you to have downloaded the 21MB of the .NET Framework first)