Apparently no one know how to do this...

Here is apost on Google Groups about it:

http://groups.google.com/group/microsoft.public.vsnet.ide/browse_thread/thread/ae7182113feb4e1b/56890c596a9f2d36?lnk=st&q=%22You+need+to+choose+another+location+for+your+Web+project%22&rnum=1#56890c596a9f2d36

Please help.