I ran into compilation problems with my MSVS 10 after installing MSVS 11Beta. Now, when I compile my C# Projects in MSVS 10 (Projects created in MSVS 10; Target framework: 3.5),
This issue occurred for me on my TFS 2010 build server after installing VS2010 and then installing .NET Framework 4.5. This allowed me to build .NET 4.5 projects but any VS2008 project targeting CLR2 (.NET 2.0 -3.5) I attempted to build would return the error. None of the suggestions on the handful of sites talking about this issue worked.
In any case, to fix this I uninstalled .NET 4.5, repaired VS2010, and then rebooted the build server. Now I am able to build VS2008 and VS2010 projects with no issues.
Luckily I no longer need to build .NET 4.5 projects as that team decided to go back to .NET 4.0.