Just an update: I figured out how to get the portable classes to work. I can't open a project of that type in Express 2012 for phone, but I can use the classes from such a project as long as I use 2010 first and build the solution/project, taking care to build debug and release versions both.
Just to be clear here, I have references to projects and not references to a dll file.
Express 2012 for phone will read the phone 7 projects from 2010. 2013 requires migration to phone 8. Express 2012 for phone can't open a portable class library, 2013 pro can.
So why am I jumping through all these hoops? Oh yeah, I remember now, in 2010 a phone project can't open my model and other library projects, so I had to use the add file as link to get things to work. However now that I figured out portable class libraries, it will be easier for me to maintain my solution(s) after moving my files to those project types. But I like using some of the features in the 2013 products (express versions) and I can use most of my code from say the express for desktop, that can read and work with my unit test projects, which don't need the phone projects.
I could also buy 2013 pro. However 2010 I already own, and ... I just installed 2013 Pro a couple of hours ago. I have 90 days to see if its worth buying. I notice the virtual launch is one day after my birthday
If some of this is coherent, its because its well past my bed time, and I ate too much Halloween candy.