Strange workflow error - visual studio - Error 319 (0x13F)

Using Visual Studio.NET 2005 we're trying to create a new workflow. However, we get a strange error in VS.Net 2005 as outlined below:

Error 4 Property 'WorkflowProperties' has invalid value. Field type 'Microsoft.SharePoint.Workflow.SPWorkflowActivationProperties' does not match with the expected type 'Microsoft.SharePoint.Workflow.SPWorkflowActivationProperties'.

Any hints, ideas etc?

Workflow error codes can be found on MSDN, but little information about how to fix them.

I also get the error as outlined below:

Could not bind property 'WorkflowProperties'
Could not load file or assembly 'Microsoft.SharePoint.Library, Version=12.0.0.0, Culture=neutral, PublicKeyToken=71e9bce111e9429c' or one of its dependencies. The system cannot find the file specified.

I'm also trying to update VS.Net 2005 with "Windows Workflow Foundation Extensions for Visual Studio 2005" as outlined in various guidelines. However, it seems that Microsoft has renamed the tool - at least I cannot find the latest released on MSDN. I often wonder why it has to be soooooooo difficult.