The application database is separate from the system database and the connection string was created using the server explorer.

I think it something more to do with Microsoft Article ID 832955, entitled:

BUG: The dtproperties system table is displayed as a user table in Visual Studio .NET Server Explorer.

I am running VS 2005 and VS 2003 on the same machine, each running with their respective version of the Mere Mortals .NET framework.

- Thomas