I'm running VS 2010 along with Expression Blend 4 beta. I created a MVVM Light project from the supplied templates and I get a System.IO.FileLoadException when I try to view the MainWindow.Xaml in VS 2010 designer window. The template already references System.Windows.Interactivity. Here are the details of the exception:

System.IO.FileLoadException Could not load file or assembly 'System.Windows.Interactivity, Version=4.0.0.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35' or one of its dependencies. Operation is not supported. (Exception from HRESULT: 0x80131515) at System.Reflection.RuntimeAssembly.nLoad(AssemblyName fileName, String codeBase, Evidence assemblySecurity, RuntimeAssembly locationHint, StackCrawlMark& stackMark, Boolean throwOnFileNotFound, Boolean forIntrospection, Boolean suppressSecurityChecks) at System.Reflection.RuntimeAssembly.nLoad(AssemblyName fileName, String codeBase, Evidence assemblySecurity, RuntimeAssembly locationHint, StackCrawlMark& stackMark, Boolean throwOnFileNotFound, Boolean forIntrospection, Boolean suppressSecurityChecks) at System.Reflection.RuntimeAssembly.InternalLoadAssemblyName(AssemblyName assemblyRef, Evidence assemblySecurity, StackCrawlMark& stackMark, Boolean forIntrospection, Boolean suppressSecurityChecks) at System.Reflection.Assembly.Load(AssemblyName assemblyRef) at MS.Internal.Package.VSIsolationProviderService.RemoteReferenceProxy.VsReflectionResolver.GetRuntimeAssembly(Assembly reflectionAssembly) at Microsoft.Windows.Design.Metadata.ReflectionMetadataContext.CachingReflectionResolver.GetRuntimeAssembly(Assembly reflectionAssembly) at Microsoft.Windows.Design.Metadata.ReflectionMetadataContext.Microsoft.Windows.Design.Metadata.IReflectionResolver.GetRuntimeAssembly(Assembly reflectionAssembly) at MS.Internal.Metadata.ClrAssembly.GetRuntimeMetadata(Object reflectionMetadata) at Microsoft.Windows.Design.Metadata.AttributeTableContainer.d_c.MoveNext() at Microsoft.Windows.Design.Metadata.AttributeTableContainer.GetAttributes(Assembly assembly, Type attributeType, Func`2 reflectionMapper) at MS.Internal.Metadata.ClrAssembly.GetAttributes(ITypeMetadata attributeType) at MS.Internal.Design.Metadata.Xaml.XamlAssembly.get_XmlNamespaceCompatibilityMappings() at Microsoft.Windows.Design.Metadata.Xaml.XamlExtensionImplementations.GetXmlNamespaceCompatibilityMappings(IAssemblyMetadata sourceAssembly) at Microsoft.Windows.Design.Metadata.Xaml.XamlExtensions.GetXmlNamespaceCompatibilityMappings(IAssemblyMetadata source) at MS.Internal.Design.Metadata.ReflectionProjectNode.BuildSubsumption() at MS.Internal.Design.Metadata.ReflectionProjectNode.SubsumingNamespace(Identifier identifier) at MS.Internal.Design.Markup.XmlElement.BuildScope(PrefixScope parentScope, IParseContext context) at MS.Internal.Design.Markup.XmlElement.ConvertToXaml(XamlElement parent, PrefixScope parentScope, IParseContext context, IMarkupSourceProvider provider) at MS.Internal.Design.DocumentModel.DocumentTrees.Markup.XamlSourceDocument.FullParse(Boolean convertToXamlWithErrors) at MS.Internal.Design.DocumentModel.DocumentTrees.Markup.XamlSourceDocument.get_RootItem() at Microsoft.Windows.Design.DocumentModel.Trees.ModifiableDocumentTree.get_ModifiableRootItem() at Microsoft.Windows.Design.DocumentModel.MarkupDocumentManagerBase.get_LoadState() at MS.Internal.Host.PersistenceSubsystem.Load() 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()

System.NotSupportedException An attempt was made to load an assembly from a network location which would have caused the assembly to be sandboxed in previous versions of the .NET Framework. This release of the .NET Framework does not enable CAS policy by default, so this load may be dangerous. If this load is not intended to sandbox the assembly, please enable the loadFromRemoteSources switch. See http://go.microsoft.com/fwlink/?LinkId=155569 for more information.