The Microsoft.Portable.CSharp.targets file is broken - when building against MonoTouch, it does not use the correct compiler. See http://stackoverflow.com/a/12062589/116899
Fixed in git master and mono-2-10 branch
*** Bug 7174 has been marked as a duplicate of this bug. ***
Jeff, the comment on the commit says the fix is wrong:
Could we make sure that this is fixed in Mono 2.10?
Duncan, can you get this fix in 2.10?
The fix is correct for 2.10 (2.10 doesn't use the same compiler for all profiles).
The comment was saying that the fix was wrong for 3.0, but that's really more of a "it depends on which MonoTouch the user is using" and until we ship 3.0-based MonoTouch/Droids, using smcs is the right thing to do.
n/m, we could still use the system's mono compiler, so we can yank the smcs stuff in master.