Resolution: You would also need to install C# along with VC++

Repro Steps
Install Visual Studio 2008 Standard with only C++
Launch VS 2008 IDE
Create any kind of new C++ project
Build the project
You will receive the following error message:Project : error PRJ0003 : Error spawning 'cl.exe'

The root cause of this issue is that cl.exe file is only included in the feature of C# in vs_std sku. That means it won't get installed by only installing VC++.
If you search for cl.exe on the machine you will find the following occurrences:

1. "C:\Program Files\Microsoft Visual Studio 9.0\VC\bin\amd64\cl.exe"
2. "C:\Program Files\Microsoft Visual Studio 9.0\VC\bin\x86_amd64\cl.exe"

The folder "C:\Program Files\Microsoft Visual Studio 9.0\VC\bin" does not include cl.exe.