We, too, have been fighting this problem off-and-on for 6 months.  Here is what I know about the general steps to reproduce.

1. Create a new solution (or edit an existing one)
2. Add a Class Library project to the solution to house some datasets, and add a dataset (xsd) to the project.
3. Add a new Class Library to the solution to house some Windows forms, and add a new Windows form to the project.
4. Add a reference in the Windows forms project to the datasets project.
5. Try to add a dataset to the newly-created windows form.  Select "Referenced Datasets" in the "Add a Dataset" dialog box, and you will not see any of the referenced datasets; the list will be empty.

Usually when this happens, all I need to do is modify the dataset project and rebuild it.  (Something about rebuilding the referenced project must regenerate whatever metadata the "Add a Dataset" dialog is reading?)  But sometimes this does NOT fix the problem.

We also have a lot of problems with our Intellisense for referenced projects, and I suspect it is related.  It really is a bummer.

The problem usually happens after adding a new project to the solution, and then