How do I run NUnit in debug mode from Visual Studio?

When I need to debug my NUnit tests, I simply attach to the NUnit GUI application nunit-agent.exe using "Debug|Attach to Process" and run the tests from the GUI. Any breakpoints in my tests (or the code they're testing) are hit. Am I misunderstanding your question, or will that work for you?

I use the same technique as you are trying Jon, without the /assembly flag, i.e.

Start External Program: C:\Program Files\NUnit 2.4.8\bin\nunit.exe

Command line arguments: "<path>\bin\Debug\Quotes.Domain.Tests.dll"

Does TestDSP.dll contain all your TestFixtures?

As my test project is not the startup project in the solution, I run my tests by right-clicking on the test project and choosing Debug --> Start New Instance