Have you tried copying the .addin file to one of the following directories? (from MM Development Guide\Mere Mortals Business Objects\Using the MM .NET Business Layer Generator\Installing the Business Layer Generator)

%ALLUSERSPROFILE%\Application Data\Microsoft\MSEnvShared\Addins = C:\Documents and Settings\All Users\Application Data\Microsoft\MSEnvShared\Addins
%APPDATA%\Microsoft\MSEnvShared\Addins = C:\Documents and Settings\UserName\Application Data\Microsoft\MSEnvShared\Addins
%VSAPPDATA%\Addins = C:\Documents and Settings\UserName\Addins
%VSCOMMONAPPDATA%\Addins = C:\Documents and Settings\All Users\Addins
%VSMYDOCUMENTS%\Addins or %USERPROFILE%\AddIns = C:\Documents and Settings\UserName\My Documents\Visual Studio 2005\Addins

Note that it may be necessary to try more than one directory location. VS looks in all the above locations (on startup) and it seems like, when something occurs to break/remove an instance of an addin - its .addin configuration file will be ignored on subsequent start-ups of VS. Also seems like, if you remove the .addin file, restart VS, shut down VS, replace the .addin file, restart VS - it will pick up the tool.

Also, verify the .addin file conforms to what's in: C:\Program Files\Mere Mortals .NET Framework 2005\MMBusinessLayerGenerator

The .addin file is:
C:\Program Files\Mere Mortals .NET Framework 2005\MMBusinessLayerGenerator\MMBusinessLayerGenerator\MMBusinessLayerGenerator.Addin