In VS2010, Silverlight 4, .NET 4, I've got a WCF service and a Silverlight app, and Silverlight is accessing the class not with Add Service Reference but by sharing the contract. Naturally, this means I have the contract in a Silverlight class library, and the service has a project reference to that library.
Strangely, this results in a /!\ icon on the reference, and a warning:
The project 'SilverlightClassLibrary1' cannot be referenced. The referenced project is targeted to a different framework family (Silverlight)
However, the reference works fine (I can use the interface in my Silverlight app) and builds fine.
Is this a bug? My guess is yes, since the warning is lying and also goes away if you add an assembly reference instead of a project reference. I filed a bug and there's more info here as well.
Best Answer
Microsoft responded to the bug I posted. The warning is intended to exist and intended to be a warning and not an error, although I would argue that the text is bad. The reason is that referencing a Silverlight project will result in runtime failures if Silverlight isn't installed properly on the machine. There is currently no way to suppress the warning.