Cannot embed interop types from assembly 'Microsoft.SharePoint' because it is missing the 'Guid' attribute

I'm trying to write an app in VB to access a SharePoint list.  

I have a 2003 server, with SharePoint 2007 installed on it, as well as Visual Studio 2010.

I've added a reference to Microsoft.SharePoint.dll in the \isapi\  directory, and added "Imports Microsoft.sharepoint" to my application. (Notice the lowercase 'sharepoint'... it didn't correct it, so I'm assuming it can't find it.)  This is confirmed when I attempt to create an object of type SPSIte (when trying to build the application):

"Error      1      Cannot embed interop types from assembly 'Microsoft.SharePoint' because it is missing either the 'ImportedFromTypeLib' attribute or the 'PrimaryInteropAssembly' attribute.      WpfApplication3"

Error      2      Cannot embed interop types from assembly 'Microsoft.SharePoint' because it is missing the 'Guid' attribute.      WpfApplication3

So.....  what I am doing wrong?
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Right click references, add reference, under .NET add Microsoft.SharePoint.

Need to ensure that it is targeted as a .NET 3.5 app not 4

Projects / appname properties

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