I was working on a custom control for silverlight. I was using Visual Studio designer to layout some controls on the page. All of a sudden i started getting AG_E_UNKNOWN_ERROR in XAML pane. I could not find anything wrong with any mark up or any attributes. I tried to remove and add some of the controls on the page. I then noticed that it was following a pattern. I was getting this error when adding a TextBox control on the page. And it was very consistent. After thinking about it I recalled that I was getting error for controls where I had added x:Name attribute to the control. I recalled when I was using Beta version of Silverlight 2, I used to get some errors in XAML for no reason. Looks like that problem has not gone away in release version on silverlight.
The way I got rid of this AG_E_UNKNOWN_ERROR was by closing project in Visual Studio and then reopen. And it works :-)