Hi Tom,

Your issue is very strange; I use VS 2010 Express on a regular basis and have never had the error shown in your log.  The "solution folder" thing is no big deal; it's annoying that it reminds you about it every time you open the solution, but just clicking "ok" makes it go away and all is normal after that.  How did you remove the reference to the solution folder?  If you edited pcbuild.sln by hand, that may account for the error you're seeing; it reads to me like your project files have been corrupted.

Here's a few steps to try. Run all of these from the root of the source repository in Command Prompt.  Note that if you have made any changes to the repo, they will be lost completely if you don't save them somewhere outside of the source tree!

Run:
   hg update null
   hg --config extensions.purge= purge
   hg update d6aa3fa646e2
   "%VS100COMNTOOLS%vsvars32.bat"
   msbuild PCbuild\PCbuild.sln
   PCbuild\python_d.exe --version

Those commands will (in order): update the repository to the null revision, clean out the repository completely so you start from nothing, update to a revision that I just built from (so I know it's good :)), set up the environment for building, build Python in debug mode, confirm that Python built.

If the build succeeds following those steps, that should mean that some change you made corrupted the project files.  If not, report back and I'll try again :)