We can't move to the RC2 until we it supports Silverlight 4 properly..
The solution?
We have had some success by just loading up a visual studio command prompt and running:
devenv /ResetSettingsUPDATE:
Also try:
devenv /resetdevenv /resetuserdataGive it a go. Let me know how you get on :)
(It might also be worth backing up your currentsettings.xml file first)
