After getting Expression Blend 3 up and running I was ready to run the Zune sample and was greeted with the prompt to upgrade my Silverlight - I ran it and was then stopped by the message "Your Silverlight developer components are out of date".

This message had me banging my head for a while because I had just finished installing everything new on my x64, Windows 7, Visual Studio 2008 sp1 beta box.   Everything is the latest software in addition to Beta and CTP development apps!

The clue came from a situation I ran into with Visual Studio 2010 - it wouldn't convert Silverlight applications from Silverlight 2 to Silverlight 3, to be more specific it would act like it converted it successfully but the project never showed up.   VS2010 has a hardcoded reference to the 2.0 folder references; my work-around was to copy the 3.0 folder to 2.0 (I have a blog on this somewhere as well as an incident reported to Microsoft).

So my assumption was that Expression Blend 3, like Visual Studio 2010 has some hard references to Silverlight tools 2 so I installed it from the following link:

http://go.microsoft.com/?linkid=9394666

I was happy to see it install without complaints about Silverlight tools 3 being installed and I found I could now successfully run the Expression Blend 3 sample!!

The key to upgrading is to install old stuff!