I'm currently writing my own mini-XAML for Windows Forms, and
encountered some hiccups when trying to make Visual Studio .NET 2003
recognize the XML schema I've created for the control template files.

The limitations of the IDE's schema support are rather severe and
completely undocumented, as far as I'm aware, so I decided to write up
a few paragraphs about my experience.  Feel free to add more
information or corrections!

 Using XML Schemas with Microsoft Visual Studio .NET 2003
 ========================================================

 Visual Studio supports schema validation and schema-based
 IntelliSense while editing XML files, but this feature is
 somewhat broken. To make it work, follow these steps:

 1. Do NOT qualify the target namespace in the xsd:schema
    element. Use an unqualified xmlns declaration, or VS
    will not find the elements defined by the schema.

 2. Do NOT use xsd:extension with complex types. VS does
    not support inheritance of elements and attributes.
    Use group and attributeGroup declarations instead,
    and chain them using the ref attribute.

 3. Copy the schema to <VS>\Common7\Packages\schemas\xml,
    or add it to the project that contains your XML files.
    Adding the schema as a solution item is NOT enough.
   
 And a final note that is unrelated to schemas: the Data
 view will NOT work with your XML files unless they are
 extremely simple, because that view is easily confused.