Visual Studio 2008 Build Runner error: <PropertyGroup> is unrecognized

Hi!
I'm trying out TeamCity but run into a problem when using the sln2008 Build Runner. The error I get is:

C:\Windows\Microsoft.NET\Framework\v3.5\Microsoft.Sdc.Common.tasks(4, 3): error MSB4068: The element ]]> is unrecognized, or not supported in this context.

I'm guessing this is a beginner's problem that is easily resolved. But how?
/Karl

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Ok, I realize that this has nothing whatsoever to do with TeamCity, it is some kind of problem with msbuild on my machine, I haven't resolved it yet though. Building from visual studio is no problem, but msbuild gives this error.

If anyone would like to give me a hint on this off topic question, I would still appreciate it, even though it might be more appropriate to remove this thread.

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