I've made a fresh install of Expression Blend 3 on Windows 7 64-Bit Ultimate and every time I create a brand new Silverlight 3 Application + Website project in Expression Blend 3 then try and run it I get the error:
Could not start "http://localhost:63523/Default.html" due to the following error: System.ComponentModel.Win32Exception:Application not found
Blend is using the Microsoft Expression Development Server and the icon for the server starts and shows in the system tray so I know it's running. When clicking Show Details on the icon I can see that the physical path is set correctly to the path of the project. The Default.html file exists in the folder that the Expression Development Server is pointing too.