I am using the MagicLibrary
for a few components. I knew it was written in Visual Studio 2003 and recompiled it in Visual C# Express 2010. It compiled just fine
Check that you are using the .Net 4 framework and not the client profile version
You find that setting when you right-click on your project, choose properties. And under application there is a setting for target framework. If you have chosen the .Net 4 framework Client Profile, then this behavior that you described can happen
I ran into a very similar issue once. In my case the problem turned out to be a missing dependency for the "vanishing" namespace's assembly. What finally gave me the information I needed was the suggestion in this StackOverflow answer to raise the MSBuild output verbosity level. After raising the verbosity setting the IDE should give you a more specific reason why the compilation fails.