Everyone else seems to be recommending using the latest version, so I'll buck the trend and suggest 2.0 if you don't actually need any features from later versions... if this really is a client library and you have no control over and little idea about who is going to use it.
It really does depend on who your users are likely to be, which in turn depends on what the REST service is. If it's some sort of social media thing, then I'd say it's more likely that your clients will be in environments where they can use .NET 4. If it's something which might well be used by financial institutions or other big businesses, they may well not have the option of using .NET 4, so you should consider earlier versions. This is the approach we've taken for Noda Time where we believe the library will be useful in a wide variety of situations, and we can't predict the client requirements.
Of course, if you know all your clients and know they will all be able to use .NET 4, then go with that.
The big downsides of sticking to .NET 2.0 are that you won't be able to use LINQ internally (unless you use LINQBridge or something similar, which adds another dependency for your library) and you won't be able to (cleanly) provide extension methods. If you can usefully expose more features to the client if you use a later version, you may want to provide multiple versions of the library - but obviously that's a maintenance headache.
Another consideration is whether you ought to provide a Silverlight version - which again depends on what sort of service you're providing and what sort of users you're expecting.