This bug was reproduced on a Windows 7 64 bit machine with installed SQL Server 2008 R2 Standart and Visual Studio 2013.
Steps to reproduce:
1. Install UI for ASP.NET Ajax through the Control Panel with all available features selected including the Demos feature
2. Open Live Demos solution in Visual Studio 2013

Expected result:
Solution is opened without errors
Actual result:
There is an error - The custom tool 'MSLinqToSQLGenerator' failed. Object reference not set to an instance of an object.

Found fix - In Visual Studio Solutio Explorer right-click on the Live \App_Code\NorthwindDataClasses.dbml file and select "Run Custom Tool"

This bug originates from support ticket 822091.