The OutputPath property is not set for this project
You can see this error in VS 2008 if you have a project in your solution that references an assembly that cannot be found. This could happen if the assembly comes from another project that is not part of your solution but should be. In this case simply adding the correct project to the solution will solve it.
Check the References section of each project in your solution. If any of them has a reference with an red x next to it, then it you have found your problem. That assembly reference cannot be found by the solution.
The error message is a bit confusing but I've seen this many times.
I had exact same error after adding a new configuration via ConfigurationManager in Visual Studio.
It turned out when the 'Production' configuration was added for the whole solution (and each project) the OutputPath element was not added to the .csproj files.
To fix, I went to the Build tab in project properties, changed OutputPath from \bin\Production\
to \bin\Production
(deleted trailing \
) and saved changes. This forced creation of the OutputPath element in the .csproj file and the project has built successfully.
Sounds like a glitch to me.