"The type or namespace name 'XmlSerializer' could not be found" error when System.Xml.dll is referenced

I've already wasted a few hours on this one:

XmlSerializer serializer;

YES, the using is there, the reference is there, I made the entire solution in VS2010 using .NET 4.0 so it's not any of those things. If I go in Object Explorer I can find the XmlSerializer class I want in the correct namespace but if I try typing the above line in to my code file and compiling I get the dreaded

The type or namespace name 'XmlSerializer' could not be found (are you missing a using directive or an assembly reference?)

warning of death. I don't get it on IntelliSense either. All other threads/websites I've looked on have come up blank or with one of the solutions I've already ruled out. What am I missing? Cheers