This is what MSDN says about the Custom Tool property:
Custom tools are components that can be used to transform files from one type to another at design time. For example, a custom tool might be a dataset code generator that reads in an XML Schema (.xsd) file and generates classes in a code file that programmatically exposes its tables and columns. There is a predefined list of custom tools available in the product; this property enables you to see which custom tool is applied to a file. In rare circumstances, you might have to change the value of this property. The value of this property must be either blank or one of the built-in custom tools.In case of Visual Studio 2008 the default tool generating the *.Designer.cs files is ResXFileCodeGenerator - type it in the property and the problem should be solved:
UPDATE:
I found an easier way to do it:
