One of our CTP users reported the following in the Microsoft.Private.Whidbey.TeamSystem.Teamfoundation newsgroup:

I am giving hateras a spin and am trying how the multiple checkout handles
merge conflicts.
So I created a merge conflict on purpose using two separate workspaces on my
local harddrive C:.

When I try to check in I get the expected merge conflict dialog and then I
choose to manually merge. But then I get an exception telling me that I
require a local workspace to resolve the conflict. But I don't know how to
create a workspace more local than my local harddrive?

I attached a word document with the screen prints and some additional
comment. Can somebody tell me if this is a known issue with the current
bits? If so is there a workaround?

I have verified that this is a bug in the December CTP.  To work around this issue, you can configure an external merge tool.

Here is a quick summary of how to configure an external merge tool (specifically, Visual SourceSafe’s merge tool) in the December CTP (this assumes you used the default installation options when you originally installed, which means that Visual SourceSafe was installed.  If not, you need to add Visual SourceSafe to the installation):

1. Within the Visual Studio IDE, while connected to a Team Foundation Server, select Tools->Options…
2. Expand the “Source Control” node and select “Visual Studio Team Foundation”
3. In the right pane, click the “File Extensions…” button
4. In the “Configure User Tools” window, click “Add…”
5. In the “Configure Tool” window, enter “.*” (you can tailor specific tools for specific extensions – for this example, we’ll set up a single tool for all extensions.  Feel free to play with adding others) in the “Extension” box and select “Merge” for the “Operation”.
6. For the purpose of this example, we’ll use the Visual SourceSafe merge utility.  Click on the browse button (“…”) for “Command”, and find ssexp.exe.  This should be in the “Microsoft Visual SourceSafe” folder contained in the “Program Files” folder.  Select ssexp.exe and click “Open”
7. For the arguments, enter “/merge %1 %2 %3 %4 %6 %7”
8. Click “OK”, “OK”, “OK” to accept the changes and return to the IDE

 At this point, you should be able to perform the merge.

Next post – creating a conflict and merging.  (You can look at the original news post (thread title = “Manual merge erro: local workspace required, but both are on local harddrive”) for a document that outlines the steps that originally discovered this bug if you want to work ahead (note that you cannot access the attached document via the web-based news viewer)).