VisualStudio bug?

it sounds like you just need a reference to System.Xaml.dll

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Re whether this is a bug in VS; well, I suppose the templates could add that reference - I can reproduce it, so it may be worth logging on connect

Was this project migrated from .NET 3.5 to NET 4.0 ? If yes, the interface now resides in System.Xaml and you need to reference it.