You will not need to generate/install an xml schema file in Whidbey. The designer will auto-gen one for you on the fly.
However, it does mean you'll need to apply the correct metadata to controls and their properties, since the autogen-logic is based on reflection and the information you provide.
Nikhil Kothari
Weblog:
http://www.nikhilk.netDeveloping Microsoft ASP.NET Server Controls and Components