We are hearing some reports of VSD debugger popping up "Unable to start debugging" dialog sometimes on customer boxes trying to debug with Win CE 5.0 device. We are suspecting this to be a issue with side by side installations_and_usages of PB and VS 2005. When this happens on the customer box, he is however able to connect to the device and deploy the files normally.
The current workaround is to delete the data store entries conman_ds_* from %userprofile%\Local Settings\Application Data\Microsoft\CoreCon\1.0. Do remember to backup this directory as a safety measure before deleting the entries.
We are trying for a consistent repro. Anyone hitting on it and willing to share the repro steps please mail me.
Stay tuned for more updates.