Hey,

I appear to be having exactly the same problem.  I can generate resources for ascx files in the root of my module folder, however any controls placed in subfolders receive no localization whatsoever. 

So I have the following Folders:

MyModule
MyModule > App_LocalResources
MyModule > User
MyModule > User > App_LocalResources

And the following files:

MyModule > Main.ascx
MyModule > App_LocalResources > Main.ascx.resx
MyModule > User > UserView.ascx
MyModule > User > App_LocalResources > UserView.ascx.resx

So if you are a regular user, Main.ascx will insert a UserView control into the page.
All localization works 100% fine with anything declared in the Main.ascx.  When the UserView control is added however, none of it's localized strings display.

This has been tried in VS 2005 and in Visual Web Developer Express.

Any ideas on what may be wrong would be greatly appreciated!

Thanks,

Zack