How to utilize Microsoft SharePoint via Visual Studio .NET

First download appropriate installer for Visual Studio 2008 Extensions for Windows SharePoint Services 3.0

http://www.microsoft.com/en-us/download/details.aspx?id=14154 - VSeWWSv13_x64.exe

Then, download Windows SharePoint Services 3.0

http://www.microsoft.com/en-us/download/details.aspx?id=14117 - SharePoint.exe

If you attempt to install Visual Studio 2008 Extensions for Windows SharePoint Services 3.0, it will ask you to first install Windows SharePoint Services 3.0, which, in turn, will give you an installation error. There is one thing you need to do before attempting to install Windows SharePoint Services 3.0: Run SharePoint on Vista Installation Helper File. It is created for Windows Vista, but works just fine on Windows 7 and can be downloaded from here

http://community.bamboosolutions.com/media/p/193/download.aspx

After downloading Vista Installation Helper File, run WssVista.msi.

After install is compete, run C:\Program Files (x86)\WssOnVista\Setup\SetupLauncher.exe and when it prompts, navigate to SharePoint.exe that you have downloaded in previous steps.

After all this is done, you can safely install Visual Studio 2008 Extensions for Windows SharePoint Services 3.0 - the first file you have downloaded.

Now, in order to add SharePint dll to your project, right-click on the Visual Studio project name, select Add Reference and browse to "C:\Program Files\Common Files\Microsoft Shared\Web Server Extensions\12\ISAPI\Microsoft.SharePoint.dll" and add Microsoft.SharePoint directove to your .NET class.