Description of the issue
The Windows Phone SDK 7.1 introduces the ability to create applications that combine Silverlight and XNA Framework technologies. If you create a new Windows Phone Silverlight and XNA Application using the project template that ships with the Windows Phone SDK 7.1, you will see a warning like the following in the Visual Studio error window:
The project 'SlXnaApp1Lib' cannot be referenced. The referenced project is targeted to a different framework family (.NETFramework)
This warning will not prevent you from building or running the Silverlight and XNA Application project, and you can safely ignore the warning.
More details about the root cause of the issue
A Silverlight and XNA Application includes a Silverlight project, an XNA Game Studio Windows Phone Game Library project and an XNA Game Studio content project. The Silverlight project is the parent project, and it includes a project-to-project reference to the XNA game library project. The warning occurs because Visual Studio detects that the XNA project does not target the same .NET Framework profile as the Silverlight project. However, on Windows Phone, there is only one .NET Framework profile, regardless of what the target framework settings are in the project files, so the warning does not indicate any possible functional problems when you build and run your application.