I have a number of very memory/cpu intense .net applications that would like to look at moving to 2008 R2 server core, core seems like the perfect solution from initial review, we have a lot of Server 2003 VM's that were P to V's and I think we are wasting a lot of host resources on these. All apps run on either .net 3.5 or 4, is there a problem with using server core like this.
2008 R2 Server Core only supports a subset of .NET. Here's the documentation on Server 2008 R2 and .NET:
http://msdn.microsoft.com/en-us/library/ff770052(v=winembedded.60).aspx
So upon first inspection, no .NET 4 for you. But I think that documentation is a tad outdated, and you can still find an installer for .NET 4 specifically for Server Core...
Yep, here it is: http://www.microsoft.com/en-us/download/details.aspx?id=22833
But you're likely still going to be limited in what .NET namespaces are supported in 2008 R2 Core: