I wish I knew what I did to cause this, but I cannot use the Visual Studio 2008 Designer at all with with MVVMLight templates. I receive a "Could not create an instance of type 'ViewModelLocator'. in any of my xaml pages. The application builds and runs fine but only the designer is broken. In the App.xaml is

<Application x:Class="ExcelReportGenerator.App"
         xmlns="http://schemas.microsoft.com/winfx/2006/xaml/presentation"
         xmlns:x="http://schemas.microsoft.com/winfx/2006/xaml"
         xmlns:d="http://schemas.microsoft.com/expression/blend/2008"
         xmlns:mc="http://schemas.openxmlformats.org/markup-compatibility/2006"
         xmlns:vm="clr-namespace:ExcelReportGenerator.ViewModel"
         xmlns:res="clr-namespace:ExcelReportGenerator.Resources"
         Startup="Application_Startup"
         mc:Ignorable="d">

<Application.Resources>
    <!--Global View Model Locator-->
    <vm:ViewModelLocator x:Key="Locator"
                         d:IsDataSource="True" />  
</Application.Resources>

I even receive the error when I create a brand new MVVMLight application. The interesting thing is if I use an express version of VS2010 I can view, edit and work in designer just fine. As much as I would love to go to VS2010, I can't right now convince IT to make that move.