For the service installer, I actually had created one previously but it seemed to be missing something. I excluded it from the project and attempted to create another. This kept failing with a fairly meaningless error. I then deleted the files left from the existing one (to the recycle bin) and then it tried to create it but that is when I ran into the active content problem. I later noticed that the .resx file for the installer had an exclamation point over it, the file was missing (though this may be related to the active content problem in the first place). Anyhow, I restored the old .resx and then it opened the designer with no problem.

I have been taking this project back and forth between VS2008 and SharpDevelop 3. After resolving the above problem, I comitted the whole thing to SVN and loaded it up at work on SharpDevelop today. All was well until I returned home to load it back into VS2008. I started getting the same active content problem, but this time it was while opening the designer for the main form of my app. On a hunch I ran VS2008 as Admin, but that did not help. Just before giving up and trying it in SharpDevelop at home, I rebuilt the solution. After the build completed, the form opened in the designer with no problem! I am thinking that the active content issue is not so much the problem, as it is a result of designer errors in VS2008 when you have IE8 installed. Yes there was the active content blocked warning, but underneath that, the errors shown look similar to those VS2005 would give when something got messed up and the designer would no longer load certain forms. As I write this, I am becoming more certain of that ascertation. The combination of the missing resx, and the fact that the 2nd time around it worked again by simply rebuiding, sound pretty similar to causes of the VS2005 designer issues.

Anyhow, hopefully this post will save someone else hours of work trying to figure it out.

-Vaelek