In Asp.Net 2.0 the ASP.Net web application has been replaced by asp.net website.But still we are missing the web project that was available in VS.Net 1.1 .But good news is that microsoft has released the Web Application project add-in for 2.0 with new features.
Download it from following URL and try it today.
http://msdn.microsoft.com/vstudio/default.aspx?pull=/library/en-us/dnvs05/html/WAP.asp