Project reference strictness in Visual Studio 2010

Visual Studio 2008 happily allows you to reference .NET 3.5-dependent projects from a project that targets .NET framework 2.0—because the CLR version is the same for both frameworks. On the contrary, Visual Studio 2010 refuses to build such a solution, perhaps out of a desire to enforce Best Practices For Creating Reliable Builds, and gives missing namespace errors:

The name 'FooTools' does not exist in the current context

and warnings such as:

The primary reference "System.Web.Extensions.Design, Version=1.0.61025.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35, processorArchitecture=MSIL" could not be resolved because it has an indirect dependency on the framework assembly "System.Xml.Linq, Version=3.5.0.0, Culture=neutral, PublicKeyToken=b77a5c561934e089" which could not be resolved in the currently targeted framework. ".NETFramework,Version=v2.0". To resolve this problem, either remove the reference "System.Web.Extensions.Design, Version=1.0.61025.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35, processorArchitecture=MSIL" or retarget your application to a framework version which contains "System.Xml.Linq, Version=3.5.0.0, Culture=neutral, PublicKeyToken=b77a5c561934e089".