I’m not using NAnt or anything fancy for most of my projects—so I needed a simple, MSBuild way to automate my version numbers in a project..
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HOLY CRAP! Why isn’t this built into Visual Studio Pro?
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Here we go:
1. Download the latest build of AssemblyInfoTask (download here) (was 1.0.51130.0 for me). This is a semi-Microsoft supported MSBuild task that gives you a lot of flexibility over your AssemblyInfo.cs files.
2. Install AssemblyInfoTask. When prompted where—install into the GAC. If you don’t have access to the GAC on your workstation, then why aren’t you developing on a VM? 
3. Locate the Microsoft.VersionNumber.targets file. If you installed to the GAC, it should be at %ProgramFiles(x86)%\MSBuild\Microsoft\AssemblyInfoTask Or %ProgramFiles%\MSBuild\Microsoft\AssemblyInfoTask (depending on your architecture).
4. Copy the Microsoft.VersionNumber.targets file into a location in your solution or project. I recommend $(SolutionDir) so you can share it amongst all of your projects. The guilde recommend pointing to the file directly; however, you can’t modify the base Major versions that way (without setting the same major version for ALL projects you ever work on). You can also rename it as approprate.
“Int16s Are Too Small” Or “Why 2007 Broke Versioning” Fix
According to experts who are much smarter than me, the build version numbers are Int16s—meaning 65535 caps out the number. Unfortunately, the year 2007 breaks this (070101 or 70101 for 07 jan 01) doesn’t fit within an Int16. Stellar.
The MSBuild team recommended taking out the year and simply placing a 1 infront of it. That works; however, I really like having the year in there somewhere.
For me, I’ve placed the year into the MinorVersion. After reviewing most of our practices, the minor version for most of our projects changes with annual maintenance OR not at all (we bump the major version). This, if nothing else, will help standardize when it changes. 
As always, YMMV.
No matter which solution you choose, you’ll need to remove the year from the BuildNumberFormats.
In your Targets file, you can change the two lines to report out the MMdd (0309, for example, today) to work around the bug. I’ve bolded the two lines below. As you can see, I also added the “9” to the MinorVersion to represent 2009.
<PropertyGroup>
<AssemblyMajorVersion>3</AssemblyMajorVersion>
<AssemblyMinorVersion>9</AssemblyMinorVersion>
<AssemblyBuildNumber></AssemblyBuildNumber>
<AssemblyRevision></AssemblyRevision>
<AssemblyBuildNumberType>DateString</AssemblyBuildNumberType>
<AssemblyBuildNumberFormat>MMdd</AssemblyBuildNumberFormat>
<AssemblyRevisionType>AutoIncrement</AssemblyRevisionType>
<AssemblyRevisionFormat>00</AssemblyRevisionFormat>
</PropertyGroup>
<!– Properties for controlling the Assembly File Version –>
<PropertyGroup>
<AssemblyFileMajorVersion>3</AssemblyFileMajorVersion>
<AssemblyFileMinorVersion>9</AssemblyFileMinorVersion>
<AssemblyFileBuildNumber></AssemblyFileBuildNumber>
<AssemblyFileRevision></AssemblyFileRevision>
<AssemblyFileBuildNumberType>DateString</AssemblyFileBuildNumberType>
<AssemblyFileBuildNumberFormat>MMdd</AssemblyFileBuildNumberFormat>
<AssemblyFileRevisionType>AutoIncrement</AssemblyFileRevisionType>
<AssemblyFileRevisionFormat>00</AssemblyFileRevisionFormat>
</PropertyGroup>
This results in a version string that looks like 3.9.0309.{increment}.
5. Open up your project’s solution and unload the project you are wanting to auto-increment. Towards the end of the file, you’ll see the default MSBuild C# build path; add the location to your new .targets file in your solution directory.
<Import Project=“$(SolutionDir)MyProject.VersionNumber.targets“ />
7. Save and Close and Reload the project.
8. Build/Rebuild your project and the AssemblyInfo.cs should set to the specified increment scheme.
You’re done!
“Too Many WebResources?” Fix
My project references numerous resources for images and style sheets; however, having these inside of AssemblyInfo.cs seems to cause it to go haywire and throw array errors (assumingly because there is more than one [assembly:WebResource()] call).
To fix this, I moved my WebResources out of AssemblyInfo.cs and into a new file under Properties called WebResources (Add New Item > Assembly Information File). Strip out everything except the WebResources you copy in and the project now compiles like a champ.
For additional setup details and options within the .targets files, the AssemblyInfoTask installer comes with a CHM help file that covers additional customizations available.