64-bit (x64) versions of Windows support both 32-bit and 64-bit processes, and corresponding 32-bit and 64-bit versions of .NET 2.0. (.NET 1.1 is 32-bit only).

.NET 1.x apps automatically run as 32-bit processes on 64-bit Windows.

.NET 2.0 apps can either run as 32-bit processes or as 64-bit processes. The OS decides which to use based on the PE header of the executable. The flags in the PE header are controlled via the compiler /platform switch, which allows the target of the app to be specified as 'x86', 'x64' or 'any cpu'. Normally you specify 'any cpu', and your app will run as 32-bit on 32-bit Windows and 64-bit on 64-bit Windows. However if you have some 32-bit native code in your app (loaded via COM interop, for example), you will need to specify 'x86', which will force 64-bit Windows to load your app in a 32-bit process. You can also tweak the 32-bit flag in the PE header using the SDK corflags utility.

Some more explanation here:

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