One thing we neglected to mention in the release notes is that you can now load up roots other than Window and Grid in the August CTP.  The list I believe is anything deriving from Panel, Page, UserControl and ContentControl. 

So if you have the latest installed - try replacing your window1.xaml with this:

<Button x:Class="WindowsApplication65.Window1"
xmlns="http://schemas.microsoft.com/winfx/2006/xaml/presentation
"
xmlns:x="http://schemas.microsoft.com/winfx/2006/xaml
"
Height="75" Width="100"
>
Hello world!
</Button>

If you want to drag and drop into it, replace the contents with a Grid.  For button you may have to size the grid in code, as the button layout sizes grid to zero.

More interestingly, you can now design user controls.

<UserControl x:Class="WindowsApplication65.Window1"
xmlns="http://schemas.microsoft.com/winfx/2006/xaml/presentation"
xmlns:x="http://schemas.microsoft.com/winfx/2006/xaml"
Height="75" Width="100">
<
Grid>
</
Grid>
</
UserControl>

Have fun!