I encountered the dreaded of “Build 9.0.30729.XX Visual Studio 2008 SP1 must be installed before installation can continue” installation error when installing the Silverlight Tools. Help/About indicated that I had 9.0.30729.1.
After a bit of thrashing around, I accepted that there may be a problem with my SP1 installation and decided to reinstall, painful as the prospect was. This was not an easy conclusion for me to accept because there were no other symptoms of trouble with my Visual Studio installation.
I wanted to report that reinstalling SP1 did in fact clear up the problem Silverlight had. Even though its a very tedious process to reinstall the service pack, you’ll probably need to do it if you get this error – to either solve your problem or rule it out.
This blog post by Jimmy Lewis has a very helpful post on the installation