In what seems to be a very odd turn, I am trying to create a Sql Database project in Visual Studio 2012, and am getting this nutty error:
Just downloading and installing the SQL Server Data Tools cured this for me;
http://go.microsoft.com/fwlink/?LinkID=274984
I faced a similar issue but in my case its due to version difference.Refer attached image. so once upgrade with right version then prob solved to me. enter image description here
Just in case the downloaded SQL Server Data Tools is not working. You can try to download this version:
SQL Server Data Tools download
I Installed SQL Server 2012 Service pack 1 yesterday and then I started getting the problem you describe in Visual Studio 2012. Not only with database projects; I could not use the SQL Server Object Explorer, not open sql-scripts and lots of other weird database related errors. Always with the same message:
"This version of SQL Server Data Tools is not compatible with ... bla, bla, bla ..."
This solution helped me: https://web.archive.org/web/20150315060703/http://blog.wharton.com.au/2012/11/16/sql-server-2012-sp-1-breaks-sql-server-database-projects/ Hope this can help you too
Update: With the March 2013 Release it seems you have to also update the SQL Server Data Tools available here See the comments in this post for more details.
This happened to me in visual studio 2012 on an existing project after I installed visual studio 2013. Installing the 2012 tools fixed it as others have said but the link provided in previous answers wasn't the one I needed. the link that did it for me is here