You get the SplashScreen parameter is not supported by the MarkupCompilePass1 error message when create and run WPF applications in Visual Studio 2008 SP1.
I was getting this error after upgrading my VS 2008 to SP1. The workaround I found was, I removed line
SplashScreen="@(SplashScreen)
from C:\Windows\Microsoft.NET\Framework\v3.5\Microsoft.WinFx.targets file.
Programming Errors & Solutions