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I would just echo what everyone else has said about the 20/3.5 AI/AI-S:
Ridiculously small. The 20/2.8 isn't large, but it dwarfs the 20/3.5.
Excellent flare control. Easily better than the 20/2.8.
Vignettes pretty strongly. Worse than the 20/2.8 in this regard.
Sharpness does decline in the corners until you stop down, and the far corners don't ever come in to the extent that they did on the 20/2.8. Sharpness goes to the 20/2.8.
20/3.5 is sharper at close distances than infinity. The 20/2.8 seemed very good across the range of focus.
I tend to agree with what Bjorn and Thom H. have said about the lenses. The 20/2.8 is certainly a nice little lens, easily Nikon's best 20mm prime and worth owning if you like the FL in a reasonable size but don't have the dough for nicer, newer lenses like the 14-24 or ZF 21/2.8 or any 20/2.8G if that ever were to happen. The 20/3.5 is tiny, and perfect for shooting closeups or into the sun. Having used both, they are distinctly different and I would usually prefer the 20/2.8, with a 20/3.5 for special applications if I had to use a Nikkor. FWIW, the newest 20/2.8s (like those that I have passed along) were very new serial numbers and probably have Super Integrated Coatings rather than Nikon Integrated Coatings. If you have the money to find the newest AI-S lenses (post 2006 or so), I think it is worth the wait. My departed 35/1.4, 20/2.8, and still-possessed 180/2.8 all had/have different coatings than my older lenses and I always thought they were advantageous to have for digital imaging.