Thanks Carlos, that may very well be my problem.
I have attempted to install the Silverlight Tools Beta 2 for Visual Studio 2008 (silverlight_chainer.exe) but have a failure 0x80070643 when installing KB950630 (the update for VS2008). So far nothing discusses this problem at Microsoft's support sites.
Since it will not install I must not have everything that is needed. I am currently configuring a Virtual PC to see if I can successfully build a VWG Silverlight Application.