Visual Studio not displaying compile time errors in editor

Solution 1:

You need to turn on the underline errors in the editor and show live semantic errors options in Visual Studio.

These options can be found here:

Tools > Options > Text Editor > C# > Advanced > Editor Help

Edit: You will need to install SP1 for this functionality to work.

Solution 2:

Select Tool -> Options, then Text Editor. Under the language you are using (ie C#), go to the Advanced and make sure the Underline errors in the editor and Show live semantic errors are checked