If you tried to create or open a Silverlight 2 Beta 2 project after installing Visual Studio 2008 Service Pack 1 (sp1) then i suggest following this installation order to try and resolve it: Step #1: Cleanup your machine http://www.microsoft.com/downloads/details.aspx?FamilyId=A494B0E0-EB07-4FF1-A21C-A4663E456D9D&displaylang=en Note: I also manually uninstalled all SL2 components I had previously installed Step #2: Install VS 2008 SP1 (or leave it installed) http://www.microsoft.com/downloads/details.aspx?FamilyID=FBEE1648-7106-44A7-9649-6D9F6D58056E&displaylang=en (or ISO version if you want a one-time download) Step #3: Install the SL2, BETA 2...