I actually just installed VS2005 B2 and receive the following error when starting my VS2003 and loading a project:
The following two files are marked as incompatible:
C:\Program Files\Microsoft Visual Studio .NET 2003\Vc7\vspackages\cslangsvc.dll
(Version 7.10.3077 [2])
C:\Windows\Microsoft.NET\Framework\v2.0.50215\cscomp.dll
(Version 8.0.50215.44(beta2.050215-4400)[4b000050])
Then compiler cannot be used in this configuration. This is usually caused by installing different flavors of VS and NDP, and not specifying the VS version for the /CompilerSourcePath and /NonNdpSourcePath options when running NdpSetup.
What is NdpSetup?