I agree that VB needs more differentiation. However, I don't agree that there should be something that can't be done with C#.
Looking back at VB6 / C++: There is not a thing that VB could do that was not possible doing it in C++. However, there was enough reason for 6 million VB developers to use this language because it was easier.
With .NET 1.1 VB.NET is too complex for many of the VB programmers. VB.NET Whidbey should be easier to work with - and I guess it will be.
One of the features that VB.NET Whidbey will have: Edit & Continue will be back for VB.