XSL Debugger Bug in VS2008 SP1

Debugging any .xslt file with any .xml file results in the following error.
Can anyone confirm this:

Microsoft Visual Studio (window title)
Unexpected error encountered. It is recommended that you restart the
application as soon as possible.
Error: Unspecified Error
File: vsee\pkgs\vssprovider\sccprj.cpp
Line number: 3999

Debugger Output is:

'Microsoft.Xsldebugger.Host.exe' (Managed): Loaded
'C:\WINDOWS\assembly\GAC_32\mscorlib\2.0.0.0__b77a5c561934e089\mscorlib.dll',
Skipped loading symbols. Module is optimized and the debugger option 'Just My
Code' is enabled.
'Microsoft.Xsldebugger.Host.exe' (Managed): Loaded 'C:\Program
Files\Microsoft Visual Studio
9.0\Common7\IDE\Xml\Microsoft.XslDebugger.Host.exe', Skipped loading symbols.
Module is optimized and the debugger option 'Just My Code' is enabled.
'Microsoft.Xsldebugger.Host.exe' (Managed): Loaded
'C:\WINDOWS\assembly\GAC_MSIL\System.Xml\2.0.0.0__b77a5c561934e089\System.Xml.dll',
Skipped loading symbols. Module is optimized and the debugger option 'Just My
Code' is enabled.
'Microsoft.Xsldebugger.Host.exe' (Managed): Loaded
'C:\WINDOWS\assembly\GAC_MSIL\System\2.0.0.0__b77a5c561934e089\System.dll',
Skipped loading symbols. Module is optimized and the debugger option 'Just My
Code' is enabled.
'Microsoft.Xsldebugger.Host.exe' (Managed): Loaded
'c:\temp\XsltDebugger.krcdvvwa.3ie\CompiledStyle***.dll', Symbols loaded.
'Microsoft.Xsldebugger.Host.exe' (Managed): Loaded
'C:\WINDOWS\assembly\GAC_MSIL\System.Data.SqlXml\2.0.0.0__b77a5c561934e089\System.Data.SqlXml.dll'
'Microsoft.Xsldebugger.Host.exe' (Managed): Loaded
'C:\WINDOWS\assembly\GAC_MSIL\System.Core\3.5.0.0__b77a5c561934e089\System.Core.dll'
The program '[5088] Microsoft.Xsldebugger.Host.exe: Managed' has exited with
code 0 (0x0).

We are currently using Source Safe 6.0d. Excluding the .xslt file from
source control does not resolved the issue.

I have confirmed using various other developers machines at my location that
this issue is specific to Visual Studio 2008 sp1.
.

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