New DataSet Fails After BTS 2006 Installation

After BizTalk Server 2006 Installation, if you try to add a new DataSet to your project, and then select to add it to the App_Code folder, you will get an error message saying: “Object reference is not set to an instance of an object.”, and when you press OK to dismiss this modal dialog box, you will the Add New Item window again, and the loop continues.., I searched around but I couldn’t find a solution or anything relevant to this weird problem, I tried to figure out what’s going on, so I will drive you the solution in case you face this problem.

After getting the error message press OK, and then press Cancel for the second Add New Item window, right click the DataSet from the solution explorer, and select “Open With”, you will get the following window, and as you can see the BizTalk Editor (Default) coming at the top, so to open the XSD file properly select DataSet Editor, then the Visual Studio 2005, will open the DataSet in the DataSet Designer and the Toolbox will get populated with the DataSet group; like TableAdapter, Query, Relation, etc..

Moreover, if you collapse the DataSet node in the solution explorer, you will find the XSS file with the same name of the DataSet, I think this is the reason behind this exception, as the BizTalk Editor is not able to manage such a file.

Note: you can make the DataSet Editor the default application that manages XSD files from the Open With window.