In this case, you might have to check if the Ado.net Entity Framework is installed. EF is still in its beta version. and it doesn't come with VS 2008.
It is a bit tricky when I first install it. To install the EF 1.0 pre-release version, the latest version at this point. you have to make sure you don't have other version of EF in your pc and you can't install VS 2008 SP1 beta nor .net framework 3.5 SP1 beta prior to the EF, or you have to install them before installing EF.
cheers
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