I guess I have figured out what of the problem is. Apparently vs2008 cares for casing in the file paths. I have exported HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\VisualStudio\9.0 before applying the hot fix and after. It appears that the only difference between the two dumps (aside from some uninstall info) is that the latter has most of the file paths starting "c:\\" (lowere case) when the former had those in upper case : "C:\\".

To anyone who's experiencing similar problem I'd suggest following steps for installing the hotfix:

• <div mce_keep="true">Follow the steps provided with the hot fix release and install it</div>
• <div mce_keep="true">Open regedit and export HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\VisualStudio\9.0 to a .reg file</div>
• <div mce_keep="true">Open the .reg file with a text editor</div>
• <div mce_keep="true">Find-replace all "c:\\" to "C:\\", save.</div>
• <div mce_keep="true">Reapply the .reg file to the registry.</div>