Remove old .Net 2.0 path references:
C:\Program Files\Microsoft Visual Studio 8\SDK\v2.0\Bin
C:\WINDOWS\Microsoft.NET\Framework\v2.0.50727
Add the new .Net 4.0 path reference:
C:\WINDOWS\Microsoft.NET\Framework\v4.0.30319
C:\Program Files\Microsoft SDKs\Windows\v7.0A\bin\NETFX 4.0 Tools\