Question: I have installed the CRM 2011 SDK addin for visual studio 2012 (ultimate) and am trying to create a XAML Workflow Activity

I have added the CRM Workflow items to the toolbox using these instructions [Add Microsoft Dynamics CRM Workflow Activities to the Toolbox](http://msdn.microsoft.com/en-us/library/fb513e3f-3ed8-44fe-8d4c-e1a8aef29870#add_to_toolbox)

When I try and drop a Workflow on the design surface it say in red text "Could not generate view for Workflow"

Hovering over the text reveals a System.IOException that says "Cannot locate resource workflowdesigner.xaml"

How do I fix this?

Answer: 
Ondra is correct, this is a problem with the latest version of the SDK. Version 5.0.9690.3448 of the microsoft.xrm.sdk.workflow.dll does not work, whereas version 5.0.9688.1533 does not present the issue. 

I had this issue occur on a XAML workflow that I previously had no problems with, and the issue turned out to be the upgrade of the SDK file.

Visual Studio 2012 Update 2 does not have any effect on this issue.
Also Visual Studio 2012 Update 2 fix this problem