UPDATE: This may be incorrect. I am working with Microsoft to understand if I got this wrong. I'll update this blog once I get the story right.
As everyone has announced already, Visual Studio 2008 and .NET 3.5 have released an SP1 that includes a bunch of fixes as well as the Entity Framework as well as ADO.NET Data Services. To support this, the Silverlight team dropped a new version of the Visual Studio tools that work with Silverlight 2 Beta 2 and Visual Studio 2008 SP1.
The one caveat is that the Silverlight library for ADO.NET Data Services is not compatible with the RTM of .NET 3.5 SP1's version of ADO.NET Data Services. Since its not compatible, if you are using ADO.NET Data Services with Silverlight, you should wait to upgrade to Visual Studio/.NET SP1 until Silverlight 2 is released (there aren't any release dates for this yet).
Note, that this is a little confused by the fact that SQL Server 2008 (released last week) requires Visual Studio 2008 SP1 RTM to install, so if you need both Silverlight 2 Beta 2 to work with ADO.NET Data Services and SQL Server 2008, there is no good solution for getting all three installed at once.
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