Fiddler is in no way magical. :-)
My first guess is that you're trying to build a .NET4-targeted assembly and using .NET2 Fiddler as a reference (or vice versa). If so, you shouldn't do that; your assembly target platform should match the version of Fiddler you have installed (v4/4.5 or v2/3.5).
Unless there's some reason you need
to use .NET4, you generally should target .NET3.5 so that your extension works properly for all users of Fiddler.
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