First App - SQL Server CE Problems

I am doing my first demo app using VS2008 on Vista. I am having 2
problems.

Background:

The app uses SQL Server CE 3.5. I created an Access script to port an
Access db to SSCE (test.sdf). I create an Smartdevice app in VS2008
for Windows Mobile 6 Professional SDK and .NET Compact Framework 3.5.
I add a datasource to the project and enter the info for the SSCE db
and import the db. Everything works fine if the database is <
128Meg.

Problems:

1. I cannot import another db to the project. I tried to also import
Northwind.sdf and I get the error.

This operation requires a reference to SQL Server Compact 3.5. The
project has a reference to a different version. Update the reference
and try again.

I get the same error if I delete test.sdf and testDataSet.xsd and try
to add test.sdf again. This means if for any reason I need to re
import the db I need to create a new app. I tried to use SSCE SP1 and
the results are the same. In the project properties I tried setting
System.Data.SqlserverCE.dll Specific Version property to false. I
have not got far enough in the development to figure out how this
error impacts me.

2. If the test.sdf is large (400Mb) then I get an error about the db
being to larger. When I add the db I use the advanced options to set
the Max database size to 1024Mb. Here is the connect string.

Data Source=C:\userdata\ppc\test.sdf;Max Database Size=1024

Here is the error message:

The database file is larger than the configured maximum database size.
This setting takes effect on the first concurrent database connection
only....

I tried making a project with only this db and I still get this error
message in Server Explorer.

Any help is appreciated. It has got to be something I am doing
wrong. I cannot believe this would be released with such obvious
errors.