Lack of Windows Phone 8 samples like this one are just becoming the reasons of my laziness.
Actually, the issue of this WebService is with Microsoft.Phone namespace. If @spier trick doesn't work for you then try this guys;
While you're adding the service, go to the Advance tab below the namespace field and Uncheck the "Reuse types in referenced assemblies" and select OK.
It should work. =)
It's great but I am still wondering, why and how a person would love to work on spreadsheets on this Tablet PC? It's quite harder when we use tablets to accomplish such tasks.
I believe, it is handy when we have to present something over Powerpoint, show multimedia content and much more like that.