As many other people have mentioned, creating web projects as non admin and not a member of the VS Developers group is a pain in the ass in VS 2003. After trying to get the permissions recipe just right last night ... it finally hit me -> All new development of web projects is now going to be in VS 2005. If I need to do something in VS 2003 for a web project (like my web site currently), I am going to use Fritz's AspNetWithoutWebProjects instead of fighting VS.Net and his buddy IIS who are still dealing with not having admin rights anymore...
One more reason to get on the VS.Net 2005 band wagon!