Embed referenced assemblies, because ILMerge won't work with WPF applications

app.cs

public partial class App : Application {
    public App() {
        AppDomain.CurrentDomain.AssemblyResolve += OnResolveAssembly;
    }

    private static Assembly OnResolveAssembly(object sender, ResolveEventArgs args) {
        var executingAssembly = Assembly.GetExecutingAssembly();
        var assemblyName = new AssemblyName(args.Name);

        var path = assemblyName.Name + ".dll";
        if (assemblyName.CultureInfo.Equals(CultureInfo.InvariantCulture) == false) {
            path = String.Format(@"{0}\{1}", assemblyName.CultureInfo, path);
        }

        using (var stream = executingAssembly.GetManifestResourceStream(path)) {
            if (stream == null)
                return null;

            var assemblyRawBytes = new byte[stream.Length];
            stream.Read(assemblyRawBytes, 0, assemblyRawBytes.Length);
            return Assembly.Load(assemblyRawBytes);
        }
    }
}

PreBuild.targets.xml

<?xml version="1.0" encoding="utf-8" ?>
<Project ToolsVersion="4.0" xmlns="http://schemas.microsoft.com/developer/msbuild/2003">
  <!-- 
    Originally written by Daniel Chambers (http://www.digitallycreated.net)
    http://www.digitallycreated.net/Blog/61/combining-multiple-assemblies-into-a-single-exe-for-a-wpf-application
  -->
  <Target Name="EmbedReferencedAssemblies" AfterTargets="ResolveAssemblyReferences">
    <ItemGroup>
      <!-- get list of assemblies marked as CopyToLocal -->
      <AssembliesToEmbed Include="@(ReferenceCopyLocalPaths)" Condition="'%(Extension)' == '.dll'"/>
     
      <!-- add these assemblies to the list of embedded resources -->
      <EmbeddedResource Include="@(AssembliesToEmbed)">
        <LogicalName>%(Filename)%(Extension)</LogicalName>
      </EmbeddedResource>

      <!-- no need to copy the assmblies locally anymore -->
      <ReferenceCopyLocalPaths Remove="@(AssembliesToEmbed)"/>
    </ItemGroup>

    <Message Importance="high" Text="Embedding: @(AssembliesToEmbed->'%(Filename)%(Extension)', ', ')"/>
  </Target>
</Project>

Nice snippet. Just one suggestion, this block:

<!-- no need to copy the assmblies locally anymore -->
<ReferenceCopyLocalPaths Remove="@(AssembliesToEmbed)"/>

can be replaced by simply removing the _CopyFilesMarkedCopyLocal target. Like that:

  <Target Name="EmbedReferencedAssemblies" AfterTargets="ResolveAssemblyReferences">
    <ItemGroup>
      <!-- get list of assemblies marked as CopyToLocal -->
      <AssembliesToEmbed Include="@(ReferenceCopyLocalPaths)" Condition="'%(Extension)' == '.dll'" />
      <!-- add these assemblies to the list of embedded resources -->
      <EmbeddedResource Include="@(AssembliesToEmbed)">
        <LogicalName>%(Filename)%(Extension)</LogicalName>
      </EmbeddedResource>
    </ItemGroup>
    <Message Importance="high" Text="Embedding: @(AssembliesToEmbed->'%(Filename)%(Extension)', ', ')" />
  </Target>
  <!-- no need to copy the assemblies locally anymore -->
  <Target Name="_CopyFilesMarkedCopyLocal" />

This will also prevent from copying pdb and xml files.

I edited EmbeddedResource action a bit. So it will properly handle localized dlls:

  <Target Name="EmbedReferencedAssemblies" AfterTargets="ResolveAssemblyReferences">
    <ItemGroup>
      <!-- get list of assemblies marked as CopyToLocal -->
      <AssembliesToEmbed Include="@(ReferenceCopyLocalPaths)" Condition="'%(Extension)' == '.dll'" />
      <!-- add these assemblies to the list of embedded resources -->
      <EmbeddedResource Include="@(AssembliesToEmbed)">
        <LogicalName>%(AssembliesToEmbed.DestinationSubDirectory)%(AssembliesToEmbed.Filename)%(AssembliesToEmbed.Extension)</LogicalName>
      </EmbeddedResource>
    </ItemGroup>
    <Message Importance="high" Text="Embedding: @(AssembliesToEmbed->'%(DestinationSubDirectory)%(Filename)%(Extension)', ', ')" />
  </Target>
  <!-- no need to copy the assemblies locally anymore -->
  <Target Name="_CopyFilesMarkedCopyLocal" />

You have all the necessary code in ResolveAssembly already, so it does not need any fixes.