VS 2010 1 Project - Multiple Project Types ?

A colleague has written a useful tool. He wrote it as a standalone tool, but it works even better as an includable dll, though it needs a bit of other functionality for it to be a really good drop-in component. What I am wondering is whether a project can be compiled as both an exe and as a dll?

There are alternatives, such as having a dll version and an exe version, since the dll version needs to include a few different methods that the exe version doesn't need, but this alternative sucks, since it would mean changing two sets of code.

Another alternative is to build the dll, then change the exe to be a project that references the dll....and does nothing other than calling one method in the dll. That kind of sucks, too, but not as bad.

I want to be able to use his module in some of my programs, and it really should be built as a component rather than a standalone app, but I want to know whether there are other options that I haven't considered.