Confusing error message

In design view of an aspx page I have an Ajax Toolkit
ToolkitScriptManager control. The markup for this is


<%@ Register Assembly="AjaxControlToolkit"
Namespace="AjaxControlToolkit" TagPrefix="cc1" %>

.....


<cc1:ToolkitScriptManager ID="ScriptManager1" runat="server">
<Services>
<asp:ServiceReference Path="LogFilesPlayed.asmx" />
<asp:ServiceReference Path="InternalConversation.asmx" />
<asp:ServiceReference Path="ZipFilesCreation.asmx" />
<asp:ServiceReference Path="SessionPing.asmx" />
</Services>
</cc1:ToolkitScriptManager>


When I look at the design view I have an "Error Creating Control -
ScriptManager1. I have just updated SP1 for VS 2008.

The error message is very confusing:

System.Web.UI.ServiceReferenceCollection must have items of type
'System.Web.UI.ServiceReference'. 'asp:ServiceReference' is of type
'System.Web.UI.ServiceReference'.

Seems like the right hand does not know what the left hand is doing.

LS