"The project you are trying to open is a Web project. You need to open it by specifying its URL path."

I hate it when I get this error even when I am opening the project from a URL. Luckily, there's a simple solution.

In the same folder as the project file (.csproj or .vbproj) of the web project you are trying to open, make a new file with the same name as the project file with .webinfo tacked on the end.

Thus, if you have a project called MyWebProject.csproj, you create a new file called MyWebProject.csproj.webinfo. In that file, it needs a short XML snippet:

<VisualStudioUNCWeb>
    <Web URLPath="http://localhost/MyWebProject/MyWebProject.csproj" />
</VisualStudioUNCWeb>

Obviously, you need to replace the URLPath value with the actual value for your web project file. Once you have this hint in place, Visual Studio should be able to load your web project without a hitch.

This seems to be Visual Studio .NET 2003 problem. I've not seen it manifest itself in Visual Studio .NET 2005 yet.