I came across an issue that makes me think there is bug in the 3.0 framework. When I try to use extension methods I get the following error:
Missing compile
I just ran into this problem myself. In my case, it was because I converted a VS 2005/.Net 2.0 project to a VS 2008/.Net 3.5 project. The conversion tool kept references to System.Core 2.0, and I couldn't find an easy way to change the references to System.Core 3.5.
I ended up re-creating the project in VS 2008 from scratch, and it was created with proper references to System.Core 3.5