I am trying to run a .NET 4.0 Console application that references a sister library project (Bar.dll) which itself references System.Web.Extensions in VS2010 B2. I am current
currently targeted framework ".NETFramework,Version=v4.0,Profile=Client".
^^^^^^^^^^^^^^
You're targeting the Client Profile, which doesn't include the Web assemblies. Go into Project > Properties > Application and change Target Framework to ".NET Framework 4".