The new extensions in .Net 3.5 allow functionality to be split out from interfaces.
For instance in .Net 2.0
public interface IHaveChildren {
str
There is nothing wrong with extending interfaces, in fact that is how LINQ works to add the extension methods to the collection classes.
That being said, you really should only do this in the case where you need to provide the same functionality across all classes that implement that interface and that functionality is not (and probably should not be) part of the "official" implementation of any derived classes. Extending an interface is also good if it is just impractical to write an extension method for every possible derived type that requires the new functionality.