For those who still have lots of legacy code as I do in .NET 1.1, has anyone found a solution for this issue: http://connect.microsoft.com/VisualStudio/feedback/ViewFeedback.aspx?FeedbackID=90240
Details are usually as follows:
Microsoft (R) Visual Basic .NET Compiler version 7.10.6001.4
for Microsoft (R) .NET Framework version 1.1.4322.2407
Copyright (C) Microsoft Corporation 1987-2002. All rights reserved.
vbc : Command line error BC2017 : could not find library 'c:\windows\microsoft.net\framework\v1.1.4322\temporary asp.net files\...\...\...\*.dll
vbc : Fatal error BC2000 : compiler initialization failed unexpectedly: The filename, directory name, or volume label syntax is incorrect.
The directory given in the command line will not exist, which makes sense given the error message. The problematic part is that everything works with a full rebuild. Since the "work around" is so easy, Microsoft of course is not going to fix the problem for .net 1.1.
To everyone who pre-emptively suggests an upgrade to .net 2.0+, that is not an acceptable solution, due to time limits and resources. To those who say that is not an acceptable excuse, go find another thread, not every company is perfect.