Basically, it's telling you to use the XmlReaderSettings instead of the XmlValidatingReader, which was deprecated.
Personally I'm not going to do the conversion, I think that you actually doing that will be good for your coding development, so here is some resources:
Look at the overloads of the XmlReader.Create() method, specifically this one.
Then have a look at the different properties associated with the XmlReaderSettings class: http://msdn.microsoft.com/en-us/library/system.xml.xmlreadersettings_members.aspx
Give it a try, see what happens and if your still having problems, ask another question :)
HTH