Don't you just hate it when you upgrade to a new OS (even when it's a beta) and everything works amazingly well, except for that one critical bit of infrastructure that just fails? That's kind of how you might be feeling if you boot up your brand spanking new Windows 8 install, install VS 2010 and the WP 7.1 SDK, followed by the 7.1.1. update to get the emulator and Tango support, boot up your project - hit F5... drum roll... emulator crashes. Sigh.
Luckily, there's an easy fix!
Rename all of the *.dess files under %systemdrive%\programdata\Microsoft\XDE and restart the emulator, and all should be good.
What's going on?
For some reason the saved state of the emulator is getting corrupted, by renaming these files (which could probably be safely deleted) you're forcing the emulator to recreate them (shutdown may be a little slower the first time you close the emulator).