After searching some reading and from websites, I try the following:-
Step 1: Open Project in 2012 RC
Step 2: Change to File View from Logical View - the Current Default
Step 3: Click to see detail under "Client" --> References
Step 4: Select and Remove the existing (!) "System.Xml.Serialization" from References
Step 5: Highlight the "References" right click to "Add Reference" to start "Reference Manager - Client."
Step 6: Under the Assemblies (Framework, Extentensions, Recent) column, select Extensions --> go to the bottom of the list you will see "System.Xml.Serialization" version 5.0.5.0, Checked It.
Step 7: Click "Ok", Tidy up by Build--> Clean Client/Solution and rebuild again. Problem solved. (Restart Project if needed).
Case Close. Information provided for those who might encountered the same problem. Cheers!
Abel