While we are preparing for a release with full express support, there have been some important changes to the devkit.
Visual C# Express (and VB.NET Express, etc) don't provide any way for extending the IDE, apart from templates. However, using the Visual Studio Shell, we can provide an experience which is almost as nice as users of the full-blown IDE get.
Our project system (handling the .Cosmos project type) is actually a custom language system. It installs just fine into the Visual Studio Integrated Shell (read: redistributable version of the full-blown Visual Studio IDE). Because this means the .Cosmos project cannot contain any code, we split that up, meaning you need have 2 projects now, a .Cosmos and a normal class library (all managed class libraries should work). The class library should contain one (and only one) public class Kernel, with a public static void Boot(). Once you add a project reference on the .Cosmos project referencing the class library, building your kernel (and the related .iso file) should work.
What does this mean for devkit? Not too much, actually, except that we made some "partial" checkins, which might not fully work. Just keep in mind that any .Cosmos projects which contain .cs files need to be converted. (they should give an error about .cs files not being compiled)