Is there a command line command for verifying what version of .NET is installed

Unfortunately the best way would be to check for that directory. I am not sure what you mean but "actually installed" as .NET 3.5 uses the same CLR as .NET 3.0 and .NET 2.0 so all new functionality is wrapped up in new assemblies that live in that directory. Basically, if the directory is there then 3.5 is installed.

Only thing I would add is to find the dir this way for maximum flexibility:

%windir%\Microsoft.NET\Framework\v3.5