Here is the explanation from Adam Nathan's WPF 4 unleashed book:
"The x:Reference markup extension is often mistakenly associated with the XAML2009
features that can only be used from loose XAML at the time of this writing. Although
x:Reference is a new feature in WPF 4, it can be used from XAML2006 just fine as long as your project is targeting version 4 or later of the .NET Framework.
One glitch is that the XAML designer in Visual Studio 2010 doesn’t properly handle x:Reference, so it gives the following design-time error that you can safely ignore:
Service provider is missing the INameResolver service"