I kept getting this error when I was trying to open my project.
There was a failure while initializing the Microsoft Visual SourceSafe source control provider. You cannot use this provider to perform source control operations.
Here is the solution:
1. Open VS2005, go to menu Tools -> Options, then click "Source Control"
2. Choose "None" for the drop-down list under "Current souce control plug-in", rather then "Microsoft Visual Source Safe"