Any one know if you can develop software for pocket pc windows 2002 using visual studio 2008. I get an error saying my device needs a new version of windows to load.

Nope.You cant install the .NET CF version 2.0 on anything below Windows Mobile 2003 . You have to use Visual Studio 2003 and the .NET CF version 1.0 if you want to target PocketPC 2002.

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