Ok, to expand my workaround to something more perminent...
You can modify the DotNetNuke Starter Kit installation program to make the workaround more perminent using the following technique...
rename the downloaded DotNetNuke Starter Kit to DotNetNuke_04.08.00_StarterKit.vsi.zip.
Open the zip file and extract the file named: Module_Compiled_VB.zip, it will have a readonly attribute set so change it so that you can edit the zip file.
Copy the ModuleName1.vbproj file to a folder on your PC and then delete the file from the Module_Compiled_VB.zip
open the project file in notepad and locate the following:
<ProjectExtensions>
<VisualStudio>
<FlavorProperties GUID="{349c5851-65df-11da-9384-00065b846f21}">
<WebProjectProperties>
<UseIIS>True</UseIIS>
<AutoAssignPort>True</AutoAssignPort>
<DevelopmentServerPort>4825</DevelopmentServerPort>
<DevelopmentServerVPath>/</DevelopmentServerVPath>
<IISUrl>http://localhost/DotNetNuke_2/</IISUrl>
<NTLMAuthentication>False</NTLMAuthentication>
</WebProjectProperties>
</FlavorProperties>
</VisualStudio>
</ProjectExtensions>
Change to...
<ProjectExtensions>
<VisualStudio>
<FlavorProperties GUID="{349c5851-65df-11da-9384-00065b846f21}">
<WebProjectProperties>
<UseIIS>True</UseIIS>
<AutoAssignPort>True</AutoAssignPort>
<DevelopmentServerPort>4825</DevelopmentServerPort>
<DevelopmentServerVPath>/</DevelopmentServerVPath>
<IISUrl>http://localhost/DotNetNuke_2/DesktopModules/$safeprojectname$</IISUrl>
<NTLMAuthentication>False</NTLMAuthentication>
</WebProjectProperties>
</FlavorProperties>
</VisualStudio>
</ProjectExtensions>
Save and close the file.
Drag the file back into the zip file using Windows Explorer
Close the Module_Compiled_VB.zip that now contains your modified project file.
Delete the existing Module_Compiled_VB.zip from the DotNetNuke_04.08.00_StarterKit.vsi.zip, and drag your modified Module_Compiled_VB.zip into it.
Rename DotNetNuke_04.08.00_StarterKit.vsi.zip to DotNetNuke_04.08.00_StarterKit.vsi and you are ready to install to VS2008.
All new Compiled Modules you add should create and add to your solution correctly.
This workaround has been tested on Vista and VS2008 RTM
Long winded but solves the problem