I know this issue has come up a lot, but I am having this problem and can't figure it out even after reading through other post and search through google results.

 This the error I get:

"Error while trying to run project: Unable to start debugging on the web server. You do not have permission to debug the server.

Verify that you are a member of the Debugger User's group on the server"

 
My setup:
Virtual Machine w/XP SP3
.NET 1.1 & 2.0
Visual Studio 2003 Development Edition V 7.1.3088 (SP1 download won't run)
IE6

What I've checked:
My user account is under the Debuggers Group
My Web App is set to version .net 1.1
Localhost is a trusted site in IE6
Integrated Windows Authenication is set in IIS

Everything was working, but then I installed some windows updates and it killed the debugger. I tried removing the updates, but it still doesn't work.
I even tried to create a new virtual machine with SP2 and install VS2003 but for some reason it says .net 1.1 is setup on my web server. The process of getting VS2003 up and running has been a huge hassle for me.

try developing with administrative priviledges and if it didn't worked add aspnet account to administrators group.

and change the ACL (security permision ) for the directory so that asp.net has full control over it.

let me know if it works
 

 Adding ASPNET to the Admins group didn't fix the problem, but how do I set the ACL? Is it under the IIS administrative tools?

Hi,

There are a couple of reasons can cause this issue. Please confirm the following information:

• Make sure that Integrated Windows Authentication is enabled. The likely cause is that only Basic authentication for Directory security of IIS is enabled.
• If you are using Integrated Windows Authentication, you need to make sure that your user account has full control on the directory of the IIS.
• If you created the Web project with a full machine name (like machinename.domainname.something), the Web site is recognized as Internet site. So, the default setting of Internet Explorer will impact on the behavior of logging on. In this case, you need to enable logging on with your current user account in "Internet" area with the IE setting.

For more information, see http://msdn.microsoft.com/en-us/library/aa290100.aspx (Section: You do not have permission to debug the server).

I hope this helps.