If you pass false for new InstanceDescriptor(ci,new object[]{test.Data},
false), to specify that it's not complete type, then designer will create
local variables in InitializeComponent method with conflicting names.

Here is an example:

public class Component1 : Component
{
...
 TestCollection _test = new TestCollection();

 [DesignerSerializationVisibility(DesignerSerializationVisibility.Content)]
 [Editor(typeof(CollectionEditor), typeof(UITypeEditor))]
 public TestCollection Test
 {
  get { return _test; }
 }
}

public class TestCollection : CollectionBase
{
 public TestCollection()
 {
 }
 public Test this[ int index ]
 {
  get { return (Test)base.List[ index ]; }
 }

 public void Add( Test item )
 {
  base.List.Add( item );
 }
 public void Remove(int index)
 {
  base.List.Remove(index);
 }
 public void Remove(Test item)
 {
  base.List.Remove(item);
 }
 public void AddRange( Test[] items )
 {

 }
 public int IndexOf( Test item )
 {
  return base.List.IndexOf( item );
 }
 public bool Contains(Test item)
 {
  return base.List.Contains(item);
 }
 public void Insert( System.Int32 index , Test item)
 {
  base.List.Insert(index, item);
 }
}

[TypeConverter(typeof(TestTypeConverter))]
public class Test
{
 public Test()
 {
 }
 public Test(string data)
 {
  _data = data;
 }
 string _data = "";
 public string Data
 {
  get { return _data; }
  set { _data = value; }
 }
 public override bool Equals(object obj)
 {
  if(obj == null || !(obj is Test))
   return false;
  Test test = (Test)obj;
  return test._data == _data;
 }
 public override int GetHashCode()
 {
  return _data.GetHashCode();
 }
 public override string ToString()
 {
  return _data;
 }
}
internal sealed class TestTypeConverter: TypeConverter
{
 public override bool CanConvertTo(ITypeDescriptorContext context, Type
destinationType)
 {
  if(destinationType == typeof(InstanceDescriptor))
   return true;
  return base.CanConvertTo (context, destinationType);
 }
 public override object ConvertTo(ITypeDescriptorContext context,
CultureInfo culture, object value, Type destinationType)
 {
  if(value is Test)
  {
   if(destinationType == typeof(string))
   {
    return ((Test)value).Data;
   }
   else if(destinationType == typeof(InstanceDescriptor))
   {
    ConstructorInfo ci = typeof(Test).GetConstructor(new
Type[]{typeof(string)});
    Test test = (Test) value;
    return new InstanceDescriptor(ci,new object[]{test.Data}, false);
   }
  }
  return base.ConvertTo(context, culture, value, destinationType);
 }
}