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Unable to get BIDS working in VS2008 using SQL 2008 R2 SP3

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I have to create an SSIS package for SQL Server 2008 R2 SP1

I have installed SQL server 2008 on my machine and check all the boxes for the install which includes the integrsation services.

I have also install VS2008 which gives the the option to create IS projects.

Each time I try and create a project I get: -

To design Integration Services packages in Business Intelligence Development Studio, Integration Services has to be installed by one of these editions of SQL Server 2008: Standard, Enterprise, Developer, or Evaluation. To install Integration Services, run SQL Server setup.

I have tried uninstalling and installing but nothing seem to help.

VS 2008 is V9.0.30729.4462 QFE

SQL Version is: -

Microsoft SQL Server 2008 R2 (SP3) - 10.50.6000.34 (X64)   Aug 19 2014 12:21:34   Copyright (c) Microsoft Corporation  Express Edition with Advanced Services (64-bit) on Windows NT 6.3 <X64> (Build 17134: )


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