There are a number of tools, described here in ascending order of cost:
The .NET Framework SDK is free and includes command-line compilers for C++, C#, and VB.NET and various other utilities to aid development.

ASP.NET Web Matrix is a free ASP.NET development environment from Microsoft. As well as a GUI development environment, the download includes a simple web server that can be used instead of IIS to host ASP.NET apps. This opens up ASP.NET development to users of Windows XP Home Edition, which cannot run IIS.

Microsoft Visual C# .NET Standard 2003 is a cheap (around $100) version of Visual Studio limited to one language and also with limited wizard support. For example, there’s no wizard support for class libraries or custom UI controls. Useful for beginners to learn with, or for savvy developers who can work around the deficiencies in the supplied wizards. As well as C#, there are VB.NET and C++ versions.

Microsoft Visual Studio.NET Professional 2003. If you have a license for Visual Studio 6.0, you can get the upgrade. You can also upgrade from VS.NET 2002 for a token $30. Visual Studio.NET includes support for all the MS languages (C#, C++, VB.NET) and has extensive wizard support.

At the top end of the price spectrum are the Visual Studio.NET 2003 Enterprise and Enterprise Architect editions. These offer extra features such as Visual Sourcesafe (version control), and performance and analysis tools.