Actually the MSDN documentation about the O/R designer state that it only works with SQL Server 2000, 2005 and express edition
MSDN Note: The O/R Designer currently supports only SQL Server 2000, SQL Server 2005, and SQL Server Express databases. For information about obtaining SQL Server Express Edition, see the Obtaining SQL Server Express section in the How to: Install Sample Databases topic
What about SQL Server 2008 ? Does it actually work with or will it works only after a future upgrade ?