This application requires a newer version of the Microsoft .NET Compact Framework than the version installed on this device

This is the second time I ran into this error in last couple months. I better write it down so I don’t forget again.

I was creating a .NET Compact Framework Application. I want it to be able to run on older devices, so I choose .NET Framework 2.0 thinking the project will be .NET 2.0 project(see picture 1). However, when I tried to run the application on a smart phone, I got the error “This application requires a newer version of the Microsoft .NET Compact Framework than the version installed on this device.” You have to specify the version of .NET Compact Framework on the second dialog box(see picture 2).

Picture 1

Picture 2