I have seen a lot of posts about the error "Windows SDK is not installed correctly" when trying to open the WCF Service Configuration Editor in Visual Studio 2008.
To fix it... open the Windows SDK Configuration Tool from the start menu.
Then...
1. select the latest version installed
2. select the VS versions you want the SDK applied to.
3. click make current.

links: digg this del.icio.us technorati reddit