There are two separate issues in the thread:
1) The first issue from above is related to the VS intellisense engine having issues with the xmlns: attribute. This is a design-time issue, and is fixed by removing the namespace.
2) The issue that you have above ewan is at runtime, and is caused because you are deploying a V2.0 application in an application directory configured to use V1.1 instead. That is why it isn't recognizing any of the new schema tags in V2.0.
To fix #2, go into the IIS admin tool (inetmgr) and pull up the properties for the application you are deploying the app into. You can then click on the "ASP.NET" tab in the properties window and map the application to use V2.0 instead of V1.1. This error will then go away.
Hope this helps,
Scott
P.S. By default we don't upgrade V1.1 apps to use V2.0 to avoid breaking existing applications. So if you already had V1.1 installed, the default site (and by default apps created under it) will be V1.1 unless you map them to use V2.0.