If you happen to be one of the many that is giving Microsoft's Silverlight 1.1 Alpha version a trial run, you may have ran into the same issue I did. When I created new Silverlight projects in VS 2008 Beta 2, the Silverlight assembly references had a warning icon next to them stating that they could not be found. The fix is quite simple - Microsoft has released a refreshed version of the Microsoft Silverlight Tools Alpha for Visual Studio 2008 Beta 2. I uninstalled the old version, installed the new version, and everything worked fine.
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