There was an issue with local resources generation in Orcas beta1. Each time we tried to perform "Generate Local Resource" for web page, A resource writer could not be found." message was shown in output window and nothing was generated. You can find reference to this problem here and here . This was not a critical issue for beta1 product stage IMHO. Now, in beta2 it gets better. Local Resource Generation option finally working fine in VS2008, but... After beta2 setup on my machine, the same problem...