Where is "Add Web Reference" after I install Orcas Beta 1
When you create a project targetting .Net framework 3.x in Orcas Beta 1, the "Add Web Reference..." menu is replaced by "Add Service Reference..." menu. "Add Service Reference..." will create a WCF (Windows Communication Framework) client to a web service. The proxy generated by WCF is very different from old web reference proxy. You can consume old web reference through new WCF client.
The WCF client is not supported when your project is targetting .Net Framework 2.0. You are still able to add old web reference to those projects. When you upgrade a 2.0 project to 3.x, if your project contains any old web reference, you will still be able to add extra old web reference. In that case, both "add web reference..." and "add service reference..." will be shown.
So if you do need add old web reference to a project targetting 3.x framework, the workaround is that you can change the targetFramework to 2.0, add one web reference and change back the target framework.
BTW, in Orcas beta 2, you will be able to add Web Reference to 3.x projects.