Rob posted the steps for fixing up the WinFX SDK to work with C# Express... THANKS!!! I think there is a slight typo... on my machine the double-double quoting of the directories got my command window angry... here is what I did:

set MyVisualStudioLocation="%programfiles%\Microsoft Visual Studio 8"
copy "%programfiles%\Microsoft Visual Studio 8\Common7\IDE\ProjectTemplates\CSharp\Avalon\1033\*.zip" %MyVisualStudioLocation%\Common7\IDE\VCSExpress\ProjectTemplates\1033
copy "%programfiles%\Microsoft Visual Studio 8\Common7\IDE\ItemTemplates\CSharp\1033\*.zip %MyVisualStudioLocation%\Common7\IDE\VCSExpress\ItemTemplates\1033
copy "%programfiles%\microsoft visual studio 8\xml\schemas\avalonFall2004CTP.xsd" %MyVisualStudioLocation%\xml\schemas\
copy "%programfiles%\microsoft visual studio 8\xml\schemas\xamlFall2004CTP.xsd" %MyVisualStudioLocation%\xml\schemas\
%MyVisualStudioLocation%\Common7\IDE\VCSExpress.exe /setup

Basically, I had to remove the quotes from around the target of the copy commands.