There’s a really retarded issue in the Blend 3 RC where it will not allow you edit a XAML file in design view. The problem is, Blend 3 RC looks at the project type when it loads it, if it’s not a project type that “supports” XAML (Like a class library) you will not be able to edit any of the XAML files in anything other than the text editor.

A quick dirty way to fix it if you have already created the project is to open the project file in notepad and under the <PropertyGroup> tag that contains the <ProjectGuid> tag, paste this line:

<ProjectTypeGuids>{60dc8134-eba5-43b8-bcc9-bb4bc16c2548};{FAE04EC0-301F-11D3-BF4B-00C04F79EFBC}</ProjectTypeGuids>

No spaces. Reload the project / solution in Blend 3 and you should be good.

Original posts are here: http://social.expression.microsoft.com/Forums/en-US/blend/thread/33030347-c99a-4f41-8be7-089c92e4ab2d

Hope it helps some poor soul out there that has begun swearing that they will never ever use the latest version that Microsoft has released, just one version earlier.