Visual Studio 2008 - Problems deploying to Smart devices

I am using Visual Studio 2008 and frequently deploy native and managed applications to my Windows CE 5.0 device. One fine day, Visual Studio started giving deployment errors.

Native applications were giving the following errors on deployment:

"Unable to start debugging"
"Catastrophic failure"

Managed applications were giving the following error:

"No such interface supported"

All the advice given in these posts did not help me:
http://social.msdn.microsoft.com/forums/en-US/windowsmobiledev/thread/8dada569-e255-4e93-8a34-adb72038068c
http://blogs.msdn.com/srini/archive/2006/01/05/509599.aspx

I was able to resolve the problem by performing a system restore to a date when my visual studio was ok. This solved the problem. I also had to reinstalled .NET Compact Framework 3.5.