R – Modify Application.Master in Sharepoint 2007

I need to deploy a Silverlight navigation on my /_layouts/ pages on a Sharepoint site. From what I understand, this requires editing the site's Application.master. However, when I edit it and deploy(after reseting IIS) I get the following error:

Type 'System.Web.UI.WebControls.ContentPlaceHolder' does not have a public property named '__Error'. at System.Web.UI.ControlBuilder.AddProperty(String filter, String name, String value, Boolean mainDirectiveMode)
at System.Web.UI.ControlBuilder.PreprocessAttributes(ParsedAttributeCollection attribs)
at System.Web.UI.ControlBuilder.Init(TemplateParser parser, ControlBuilder parentBuilder, Type type, String tagName, String id, IDictionary attribs)
at System.Web.UI.WebControls.ContentPlaceHolderBuilder.Init(TemplateParser parser, ControlBuilder parentBuilder, Type type, String tagName, String ID, IDictionary attribs)
at System.Web.UI.ControlBuilder.CreateBuilderFromType(TemplateParser parser, ControlBuilder parentBuilder, Type type, String tagName, String id, IDictionary attribs, Int32 line, String sourceFileName)
at System.Web.UI.ControlBuilder.CreateChildBuilder(String filter, String tagName, IDictionary attribs, TemplateParser parser, ControlBuilder parentBuilder, String id, Int32 line, VirtualPath virtualPath, Type& childType, Boolean defaultProperty)
at System.Web.UI.TemplateParser.ProcessBeginTag(Match match, String inputText)
at System.Web.UI.TemplateParser.ParseStringInternal(String text, Encoding fileEncoding)

Does anyone have any insight into this error?