After another machine rebuild due to thinking that I had hosed up my VS install, I finally found this documented problem. I was missing two things in the VS 2008 XAML editor: (a) Intellisense, and (b) +/- collapsable regions automagically created for all XML nodes.
Turns out they're both fixed by the same issue: Running Windows SDK 6.1 for .NET 3.5 AFTER VS 2008 breaks it.
http://forums.microsoft.com/MSDN/ShowPost.aspx?PostID=2892404&SiteID=1Bottom line:
regsvr32 C:\Program Files\Common Files\Microsoft Shared\MSEnv\TextMgrP.dll
