I just got word today from the Group Program Manager of the Compact Framework team that Compact Famework 2.0 Service Pack 1 (due out next year - dates not finalized, so I won't speculate) will have the following support for general Windows CE 4.2:
- Runtime support only
- Supported for all WinCE processor types (i.e., not just ARM family)
The picture for integration into Studio 2005, debugging, emulators and all of that is still fuzzy, so for now I'd plan pessimistically and assume that the two points above are all you'll get, but at least it lets you move forward.