We have recently migrated all of our workstations to a different Windows domain at our office. Some folks were getting the following error when trying to open a DataSet in Visual Studio 2005:

Key not valid for use in specified state

The problem can be caused by the change of a username from the old domain to the new domain. Visual Studio is not able to properly decrypt some its settings.

The fix is to rename/delete the following file:

C:\Documents and Settings\YOUR USERNAME\Application Data\Microsoft\VisualStudio\8.0\ServerExplorer\DefaultView.SEView

You will now have to add back all your databases to the Server Explorer toolbox (but you only have to add them at a later time as you need them).

Thanks to Robert Stam for this tip.