The Silverlight 4 Beta does not install the System.Xml.Linq.dll assembly into C:\Program Files (x86)\Microsoft Silverlight\4.0.41108.0 along side the rest Silverlight 4 assemblies. It’s okay, it’s a beta: “You knew the job was dangerous when you took it, Fred.”

The good news is that the assembly is installed in the C:\Program Files (x86)\Microsoft SDKs\Silverlight\v4.0\Libraries\Client folder. So when adding a reference to System.Xml.Linq in a Silverlight application, just browse to the assembly in this folder and you’re off to the races.

(On 32-bit systems, replace C:\Program Files (x86) with C:\Program Files. But you knew that.)