This has to do with source control, I'm using VSS and the Visual Studio 2008 plugin. When the DLL of a referenced project gets included in a project (and checked into VSS), on the next build it will fail because those files aren't checked out as part of the build process and will be read only.
I could exclude the entire bin folder and all dlls, but that is where I put my static dlls (ie. the ones that aren't rebuilt as part of the solution) and interestingly, Visual Studio treats dlls other than outputs of other products as excluded files just fine.
In VS2005, the VSS plug in didn't automatically add the output of referenced projects as files pending check in, but in VS2008, it does.
Anyone run into this issue or find a work around?