>I thought I would see if I could figure out the answer to your question (although, to be honest, I wasn't even sure what you were asking about). But, I couldn't even find how to add a Web Service project to my solution in 2005!!! (I obviously have not played around with it enough yet, since Web Services are high on my list of the proper way to access data). I'm sure there was something I forgot to tweak, some setting somewhere, but I didn't get around to looking into it further (and I'm at the office today, where I don't have 2005 loaded). Have you found an answer to your question yet?
Yes, for creating a Web Service project, you have to chose File / New Web Site / ASP.NET Web Service. I don't know exactly what changed but I know it is different than the previous interface.
When creating a project in the new interface, I can no longer see the Region section. That used to be a section with a + sign that we could expand to put some Initialization code. This has probably shifted towards the same direction as the forms. In the forms, this is now in the designer file. But, for a Web Service, I cannot see a designer file.