> is DotNet really the logical progression from classic ASP?
Yes and no. You *can* use most classic ASP techniques when creating an ASP.NET page (e.g., you can do stuff such as <%= Now() %>), but those techniques will limit your exploration of the full range of ASP.NET.
Quite frankly, there are more similarities between Classic ASP and PHP (for example) than there are between ASP and ASP.NET. At least when it comes to usual practices.
ASP.NET is enormously powerful, but to get to all its power, you really have to simply toss out the ASP code and start rewriting from scratch.
> Do I use Visual Studio for creating DotNet applications?
Yes. Period. Oh, there are other products on the market now that can create ASP.NET pages, but given that Visual Web Developer is a perfectly adequate free version of Visual Studio for any one person shop (or even any 3 to 6 person shop), there's no reason to go afield. Plus VWD will, if you want it to, always be in step with the latest versions of ASP.NET.
> Are there any type of converters that will (attempt) to convert classic ASP?
None that I'm aware of. And, quite frankly, I don't know that I would trust one to do a decent job if it existed. ASP.NET really and truly requires that you have an entirely different view of the web world that classic ASP did.
I wish I could give you a better answer, but I can't. We (a team of two) are faced with your same situation, and we have concluded that the only viable solution is to just start re-writing from the ground up. Luckily, our site is so data-centric that we can leave the admin pages in classic ASP while we change the user-facing pages to ASP.NET. The admin pages receive maybe 0.1% of the traffic that the user-facing pages do, so performance is not an issue. And they do a perfectly adequate job of putting data into the right places in the database, so why change them?
An optimist sees the glass as half full.
A pessimist sees the glass as half empty.
A realist drinks it no matter how much there is.