do you want to use .NET framework 3.5 as the target framework in your project ?
if you are using Visual st udio 2008 as the IDE & you wish to use Framework 3.5 , a different version of this assembly is needed , check your project Target framework version
if not then please take a look at this page
http://social.msdn.microsoft.com/Forums/en-US/asmxandxml/thread/bedf71cd-fe33-4535-b275-0c85a12466b9