Silverlight 4 beta + RIA Services - TargetInvocationException at first step

Question

I've installed the Silverlight 4 beta toolkit and created a new silverlight business application. Without making anychanges at all, when I try to look at the Mainpage.xaml in designer view I get the following error in the designer window:

System.Reflection.TargetInvocationException
Exception has been thrown by the target of an invocation.
   at System.RuntimeMethodHandle._InvokeConstructor(IRuntimeMethodInfo method, Object[] args, SignatureStruct& signature, RuntimeType declaringType)
   at System.RuntimeMethodHandle.InvokeConstructor(IRuntimeMethodInfo method, Object[] args, SignatureStruct signature, RuntimeType declaringType)
   at System.Reflection.RuntimeConstructorInfo.Invoke(BindingFlags invokeAttr, Binder binder, Object[] parameters, CultureInfo culture)
   at System.RuntimeType.CreateInstanceImpl(BindingFlags bindingAttr, Binder binder, Object[] args, CultureInfo culture, Object[] activationAttributes)
   at System.Activator.CreateInstance(Type type, BindingFlags bindingAttr, Binder binder, Object[] args, CultureInfo culture, Object[] activationAttributes)
   at Microsoft.Windows.Design.Features.FeatureManager.FeatureConnectorEntry.AttemptActivate()
   at Microsoft.Windows.Design.Features.FeatureManager.FeatureConnectorEntry.OnRequirementsChanged(Object sender, EventArgs e)
   at Microsoft.Windows.Design.RequirementValidator.OnRequirementChanged(Object sender, EventArgs e)
   at Microsoft.Windows.Design.RequirementSubscription.OnRequirementChanged()
   at Microsoft.Windows.Design.RequiresContextItemAttribute.RequireContextItemSubscription.OnContextItemChanged(ContextItem item)
   at Microsoft.Windows.Design.SubscribeContextCallback.Invoke(ContextItem item)
   at Microsoft.Windows.Design.EditingContext.DefaultContextItemManager.OnItemChanged(ContextItem item)
   at Microsoft.Windows.Design.EditingContext.DefaultContextItemManager.SetValue(ContextItem value)
   at MS.Internal.Host.ToolSubsystem.ActivateTool(ToolFactory toolFactory)
   at MS.Internal.Host.ToolSubsystem..ctor(EditingContext editingContext, DesignerContext designerContext)
   at MS.Internal.Host.Designer.Load()
   at MS.Internal.Designer.VSDesigner.Load()
   at MS.Internal.Designer.VSIsolatedDesigner.VSIsolatedView.Load()
   at MS.Internal.Designer.VSIsolatedDesigner.VSIsolatedDesignerFactory.Load(IsolatedView view)
   at MS.Internal.Host.Isolation.IsolatedDesigner.BootstrapProxy.LoadDesigner(IsolatedDesignerFactory factory, IsolatedView view)
   at MS.Internal.Host.Isolation.IsolatedDesigner.BootstrapProxy.LoadDesigner(IsolatedDesignerFactory factory, IsolatedView view)
   at MS.Internal.Host.Isolation.IsolatedDesigner.Load()
   at MS.Internal.Designer.DesignerPane.LoadDesignerView()

Running the basic silverlight project results in IE crashing (unsurprising given the above errors). What is worse is that I loaded an existing Silverlight 3 app and tried to examine the Mainpage.xaml there and got the same error (help!).

I've now tried this on two compeltely different pc's and got exactly the same issue. Any ideas?