I ran into this exception while taking a look at the ScrewnTurnWiki source code:
SQL Server Compact is not intended for ASP.NET development
Even though I was referencing the correct 4.0 SqlServerCe assembly it kept tossing this exception (which, I've used SQL Server Compact with ASP.NET before and never had this issue). After some searching I had someone suggest adding this line of code before the database objects are setup.
C#
AppDomain.CurrentDomain.SetData("SQLServerCompactEditionUnderWebHosting", true);
VB.Net
AppDomain.CurrentDomain.SetData("SQLServerCompactEditionUnderWebHosting", True)
I was also previewing the in development version of STW that targets the 4.0 framework. The original developer stopped development and it seems to have been picked up by a group that have moved the project over to Codeplex. I'm not really sure what state the project is in or if will quickly fizzle out. Time will tell.