There are a couple of postings about this on the web, but none seem to be complete. These are the steps I took to get this to work:

• Ensure WSS 3.0 SDK is installed. Remember to restart VS 2010 after the installation.
• Ensure WSPBuilder (with VS2010 integration) is installed.
• Create a new VS project, of type WSPBuilder Project with Workflow.
• Once the project is created, in VS right click the project and choose Add, then Sequential Workflow. There will be an error with the Designer.
• Add the following references to the project. This will fix the Designer, but you will not have the SharePoint Workflows in the toolbox.
  • Microsoft.Office.Workflow.Tasks
  • Microsoft.SharePoint
  • Microsoft.SharePoint.WorkflowActions
  • System.Drawing
  • System.Workflow.Activities
  • System.Workflow.ComponentModel
  • System.Workflow.Runtime
  • System.WorkflowServices
• In the Solution Explorer in VS, right click the project and choose Unload Project.
• Right click the project again and choose to Edit the project file.
• Locate the <ProjectTypeGuids> element underneath the first
  PropertyGroup element, it should look like below:

  <ProjectTypeGuids>{14822709-B5A1-4724-98CA-57A101D1B079};{FAE04EC0-301F-11D3-BF4B-00C04F79EFBC}</ProjectTypeGuids>

  Replace it with:

  <ProjectTypeGuids>{F8810EC1-6754-47FC-A15F-DFABD2E3FA90};{14822709-B5A1-4724-98CA-57A101D1B079};{FAE04EC0-301F-11D3-BF4B-00C04F79EFBC}</ProjectTypeGuids>

• Save the project file and reload the project. You should now have the SharePoint Workflows in the toolbox.

Update: After the above steps I was able to create workflows and compile the project. When building the project on our TFS build server however, I got the errors below:

C:\Windows\Microsoft.NET\Framework64\v4.0.30319\Workflow.VisualBasic.Targets (147): The type or namespace name ‘TargetFrameworkAttribute’ does not exist in the namespace ‘System.Runtime.Versioning’ (are you missing an assembly reference?)

and

c:\Users\[build service acccount]\AppData\Local\Temp\.NETFramework,Version=3.5.AssemblyAttributes.cs (4): The type or namespace name ‘TargetFrameworkAttribute’ does not exist in the namespace ‘System.Runtime.Versioning’ (are you missing an assembly reference?)

I did these additional tweakings to the project file:

• Delete <Import Project=”$(MSBuildToolsPath)\Workflow.VisualBasic.Targets” /> (as I did not have VB installed)
• Search for <OldToolsVersion>2.0</OldToolsVersion> and replace the value with 3.5
• Search for <TargetFrameworkVersion>3.5</TargetFrameworkVersion> and replace the value with v3.5 (add the ‘v’ in front)
• Search for <ProductVersion>8.0.30703</ProductVersion> and replace the value with 9.0.30729

After the above steps the project was building successfully on the build server.