This looks like a dup of this question: .NET 4.0 build issues on CI server and in any event should be solved in the manner prescribed there.
Make sure the windows 7 SDK is installed with (at a minimum) both the .NET Development "Intellisense and Reference Assemblies" and "Tools." If they say they are already installed, yet the reference assemblies do not exist on your disk, then uninstall and reinstall. I have confirmed the fix on my build server.
