Microsoft .NET compatibility

Question

I used VS2010, and target for .Net 2.0 (VB.Net Windows Form application)

How to decide what is the .Net target I decided on 2.0 because I understood it will be OK if

Answer 1

A .NET 2.0 application needs .NET 2.0 to run. A .NET 3.0 or 3.5 application only needs .NET 2.0 plus whatever additional .NEt 3.0/3.5 assemblies it actually uses.

A .NET 4.0 application needs the .NET 4.0 CLR, so .NET 4.0 must be installed.