make sure you install visual studio 2008 sp1
what version of silverlight do you have on your computer
you can check this on control panel-programs-program and features
if you have version 2.0.31005.0 you will need to upgrade
install upgraded developer runtime from here
http://silverlight.net/GetStarted/
If you have a previous version you must unistall silverlight.....
I was on vacation and I just saw your post....hopefully you have solved this problem
Please mark this post as answered...Thanks