Fix: "Configuration system failed to initialize" error on Visual Studio Express 2010

Yesterday, after copying a project to different location, I got this annoying error:

Configuration system failed to initialize.

After digging in the Exception Text, I found that the problem is in the user settings saved file.
These files are stored in the directory  
C:\Documents and Settings\user-name\Local Settings\Application Data\application-name

Deleting the directory fixed the problem, although saved user settings were deleted too.