I have made an application using Visual Studio LightSwitch 2011 (v1) running on Visual Studio 2010 Professional. It is a desktop application, and I use SQL Server Authentica
It happened to me when I tried to add a reference that didn't have portable support into the common (it came up with a warning when I added it, but I didn't listen at first). If you've done that, uncheck the reference and it should be fine