I discovered that I had the same problem recently. I opened a support call with Microsoft and spent about 4 hours on the phone with them. Interestingly they told me that I should hand code all my sql and not rely on the generated code associated with datasets. They looked at my sln file thinking that had something to do with it. Suggested that my project had gotten corrupted and that I should start a new solution and add my files in one at time until we found the problem.
A little frustrated I spend an hour or so tinkering around and discovered that the problem appears to be related to the connection string and driver that is configured in the connection string. Apparently OLEDB drivers do not support this feature. You have to use the .NET Framework Data Provider for SQL-Server. When you are configuring your data source you have to select this setting from the drop down field titled 'data provider' just below the data source list.
The three connection strings below illustrate the difference. The first two are OLEDB connection where as the last one is the .NET Framework Data Provider for SQL-Server.
<
connectionStrings><
addname="XDM.My.MySettings.connectionString"connectionString="Provider=SQLOLEDB;Data Source=BCHAMB0705\sqlexpress;Integrated Security=SSPI;Initial Catalog=ADSM-DEV1"providerName="System.Data.OleDb" /><
addname="XDM.My.MySettings.DefaultConString"connectionString="Provider=SQLOLEDB;Data Source=bchamb0705\sqlexpress;Integrated Security=SSPI;Initial Catalog=ADSM-DEV1"providerName="System.Data.OleDb" /><
addname="XDM.My.MySettings.nativeConString"connectionString="Data Source=bchamb0705\sqlexpress;Initial Catalog=ADSM-DEV1;Integrated Security=True"providerName="System.Data.SqlClient" /></
connectionStrings>Brady