Silverlight Tools for Visual Studio installs the Silverlight SDK; the Silverlight 2 SDK featured System.Web.Silverlight assembly that had Silverlight ASP.NET control through which you can host your Silverlight application. The Silverlight 3 SDK doesnt has this assembly…If you have used this control and upgrading to latest tool…before uninstalling Silverlight 2 Tools; copy this assembly from %WINDIR%/Program Files/Microsoft SDKs/Silverlight/v2.0/Libraries/Server location. You can use this control with Silverlight 3 projects by setting MinimiumVersion to “3.0” (or 3.0.40624.0 to be exact; 3.0 works too)
Hosting your application through this control you will naturally not have access to latest v3 parameters like EnableGPUAcceleration or EnableCacheVisualization etc..You will need to use the good old <object /> tag or use the Silverlight.js file from Silverlight 3 SDK. Read the whitepaper titled ASP.NET Server Controls for Silverlight in Silverlight 3 SDK for complete information.
The source code of Silverlight 2 SDK’s System.Web.Silverlight assembly is available here; in case you need to hack it!