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I have xsd.exe here: C:\Program Files\Microsoft SDKs\Windows\v6.0A\bin\xsd.exe So I think you have yours at the Windows Platform SDK corresponding path on your machine. Make sure you have installed PlatformSDK sometimes it can be in VisualStudio directory
C:\Program Files\Microsoft SDKs\Windows\v7.0A\Bin
Or on a 64 bit machine:
C:\Program Files (x86)\Microsoft SDKs\Windows\v7.0A\Bin