This has been annoying me for an hour or two, so I thought I'd put the solution up here.  I'm using VMWare to host a pair of development machines (a domain controller and a SharePoint/SQL box).  Because I've got a few other developers here in the room with me sharing the same virtual machines, we are all running our machines on private VMWare networks which can't reach the actual network.  This means I've got to use Visual Studio on my host machine (my laptop) to access Team Foundation Server.  I'm saving my code to my external HDD into the same folder structure where I store my VMs.  Inside of the SharePoint server VM, I've enabled Shared Folders and I've mapped a drive to the \\.host\Shared Folder so I can open the projects inside of the VM.

I've installed Visual Studio 2008 and I want to edit my source code.  Every time I open one of my projects, I've been getting a dialog box which helpfully informs me that the project location is not trusted and that I might experience some errors.  Well, I've certainly been experiencing some errors (not being able to write Win32 resources during the build process) so I need to make the path a trusted path.

Here is what you can do to enable a VMWare Shared Folder part of the Visual Studio trusted paths.  The idea comes from this MSDN article.

1. Start...Run..."mmc"
2. Add the SnapIn for .Net Framework 2.0 Configuration (mscorcfg.mmc)
3. Expand My Computer...Runtime Security Policy...Machine...Code Groups...All_Code
4. Click on LocalIntranet_Zone
5. In the right pane, click the Add a Child Code Group link
6. Chose to create a new code group and give it a name
7. Pick the type of "URL" and enter the path as file://\\.hosts\Shared Folders\*
8. Set it to Full Trust and hit Finish

According to MSDN, this should have worked, but it didn't.  So I ended up having to copy my code to a directory on the C: drive and work with it there.  Really annoying!