Could you give me a step by step in how you encounter this error? I can come up with a solution if I can duplicate it, but I can't. Please post any needed files that I will need to re-create the situation
If you are talking about the not being able to debug on the device it's really easy to recreate I guess as it won't work for any apps at all.
Just your average Hello World would do it.
I plug in the phone, Zune running, not locked and press F5 in VS 2010.
It builds and deploys to the phone with no problem at all but then just throws the message:
The application could not be launched for debugging. Ensure that the
target device screen is unlocked and that the application is installed.
I have no idea why it won't work at the moment.
/J