The war claimed the lives of several million Vietnamese and 58,000 US troops as well as divided America.
Bush and Prime Minister Phan Van Khai talked on Tuesday about the continuing search for American soldiers' remains to close what the US leader called a "sad chapter".
But they focused their attention on Vietnam's desire to join the World Trade Organisation (WTO) as well as its human rights record, which some lawmakers say remains tainted.
"The Vietnamese economy is growing quite substantially," said Bush, who announced plans to attend an Asia-Pacific economic summit next year in Hanoi.
"We talked about our desire for Vietnam to join the WTO. We talked about security issues and a mutual desire to coordinate in the war on terror."
The president also noted the Vietnam Religious Freedom Agreement, an accord signed in May that Bush said would make it easier for people to worship freely in Vietnam.
Senator Sam Brownback, a Kansas Republican, and 44 other members of Congress sent a letter to Bush urging him to keep pressing Vietnam to improve its human rights record and noting that last year, for the first time, the State Department designated Vietnam a "country of particular concern" for violating religious freedom.
Human Rights Watch says hundreds of dissidents have been jailed on criminal charges for advocating democratic reforms or using the internet to disseminate proposals for human rights and religious freedom.
"It won't take long to find out if this is a public-relations coup on the part of Khai or whether it's sincere"
New Jersey Republican
In the House, Representative Chris Smith, a New Jersey Republican, called Khai a "master of deception" and pledged to hold hearings in Congress between now and the summit in Hanoi to see if the agreement was being implemented.
"It won't take long to find out if this is a public-relations coup on the part of Khai or whether it's sincere," Smith said.
White House press secretary Scott McClellan said Bush discussed the importance of moving forward on improving human rights and expanding religious freedom. "Vietnam has taken some steps," McClellan said. "We welcome those steps; there is more to do."
Khai said: "We believe that America can find in Vietnam a potential cooperation partner.
"We have a population of 80 million people, which means a huge market for American businesses."
He added that although there were cultural and historic differences between the US and Vietnam, he and Bush agreed the two nations could work together to reduce differences and improve bilateral relations.