I received this error message when opening a Project file from my solutions Sharepoint site (Team Foundation server Beta 3).  After a bit of hunting online I stumbled upon a post that spells out how to work around this and the fix in the final release … here it is in short …

  1. Click OK on the error
  2. Save the file to the local drive
  3. Close MS Project
  4. Open the file off the local drive
  5. Make changes and then upload the file to the site

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