This is old news but something I had to use recently....
Add a .cs file to your project, any filename is fine but I called mine ExtensionAttribute.cs.
Add the following code...
Wherever you declare your extension methods you need to include 'using System.Runtime.CompilerServices' to the top.
Note:- You must be using Visual Studio 2008 for this to work.
The Moth - Using Extension Methods in Fx 2.0 Projects
CodeThinked - Using Extension Methods in .net 2.0