Accessing the resource file '*' has been dissalowed

On a new SharePoint dev server that I was given by a customer, I kept getting the following error in Visual Studio and in Reflector:


The problem turned out to be a registry key that no one knows why and how it got to be different than the default:


HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\policies\Explorer\NoFileUrl




The value should be "0", but it was "1" - which means that internet explorer couldnt open files using the file:/// unc to access local files.




Thanks are to Michael Curran who found this solution.