Well, it's the only thing in your original post that seemed wrong.

Yes, I'd say "strange".  But I don't know that it's not allowed.  There's  
not much difference between a DLL and an EXE, other than the way the OS  
loads them.  I don't know that those differences would lead to some  
compiler error.

That said, first thing you should probably try is changing the EXE project  
to be a DLL instead, then reference that DLL.

If that doesn't fix the problem, you'll need to be more specific about  
what's not working.  For best results, you need to come up with a  
concise-but-complete code sample that reliably demonstrates the problem.  
In this case, that probably means a pair of minimal projects, one that  
references the other.  Show us the projects, describe precisely how you're  
referencing one from the other (you should be adding one as a reference to  
the other, and if you want to use a class in that one without qualifying  
it, you'll have to add the namespace using directive in the other to  
support that).  And finally, and perhaps most importantly, be very  
specific about the error you're getting.  What line of the posted code  
causes the error and what is the _exact_ text of the error?

Pete