I encountered this problem after I upgraded the Windows 7 OS to Windows 10 OS and opened the stable .NET 3.5 Compact Framework Solution.
Below is the screenshot of the error message shown in Visual Studio:
To get rid of this error you must install the .Net Compact Framework PowerToys into your Windows 10 OS!!
Follow this link to install it: https://www.microsoft.com/en-us/download/confirmation.aspx?id=13442