With prior versions of the Windows Azure SDK for .NET any time you opened a Windows Azure Cloud Service project after upgrading the Windows Azure SDK for .NET on your development machine, Visual Studio would automatically start the Visual Studio Conversion Wizard to upgrade the project. The June 2012 version of the SDK does not perform this automatic conversion for you. If you want to convert your Windows Azure Cloud Service projects from an older version of the SDK to the latest release here’ s what you’ll need to do:
Step 0: Install the latest version of the Windows Azure SDK for .NET. You can get it here.
Step 1: Open the solution that contains your Windows Azure project in Visual Studio.
Step 2: Right click on the Azure project (not the web and/or worker role projects) you want to upgraded and click Properties.
Step 3: You should see the following screen that lets you know your running an older version of the Windows Azure SDK. In my case I was running the November 2011 release, but your scenario may be different. Click the Upgrade… button.
Step 4: Your Windows Azure project will be unloaded and the Visual Studio Conversion Wizard will start. Click Next.
Step 5: Create a backup of the project, if you want to, and click Next.
Step 6: A summary page will display. Click Finish.
Step 7: After the conversion is complete click Close.
Step 8: To verify the conversion, right click on the Windows Azure project and click Properties (like in step 2 above). The Windows Azure Tools version should now read June 2012.
Hope this helps!