I had the same issue and found that , its not possible to to run the soultion (which is developed in .Net 3.5 and SQL server 2005)  in VS 2008 and Vs 2010, because VS 2010 installs SQL server 2008 instance and updated the SQL server 2005 instance to SQL server 2008 instance if it is already installed, so now  we lost SQL server 2005 instance.

We can run the solution in VS 2008 but can not deploy the DataBase project as it is trying to use SQL server 2008 instance.

We can run the solution in VS 2010 but can not deploy the Datebase project as it is using SQL server 2008 instance.

We are going crazy here...

we want  to run the solution in VS 2008 and VS2010 (for test automation).

is my finding correct that it is not possible?

If it is possible, how?

Regards

Rajender

Avanade