I can't reference User.ascx from my WAP DNN Module. It says path not found. 

<%@ Register TagPrefix="dnn" TagName="User" Src="~/Admin/Users/User.ascx" %>

From what I've read I just need to use local IIS but it didn't work also.

I ticked on use Local IIS Web Server.
Specific Project URL as http://www.bayercare.loc/DesktopModules/Optx_Registration.
Clicked on create virtual directory (What does this do? It doesn't create a new one in IIS).
Ticked  Override application root URL.
put http://www.bayercare.loc/ on the textbox.

I'm I still missing something?

I am using DNN 04.09.04 and Visual Studio 2010 RTM

Where does it say the ascx file can't be referenced? Does it say that inside visual studio or after you load your module onto the dnn install and load up the page? If it says it inside visual studio I wouldn't worry about it, as long as it can find it once it is running on the site. I've never been able to get those to reference correctly while actually developing. I think you could do something like ../../Admin/Users.User.ascx while you are developing and change it when you deploy.