I am cross referencing this to Visual Studio 2008 since I first ran into this trying to connect to the remote website. I got yelled at:
When I looked I found that it had been installed and even approved to run:

So I right clicked on the Website, choose All Tasks, and Configure Server Extensions 2002

I got yelled at, AGAIN!

This looked a LOT more serious. But luckily some web browsing gave me an hint. What you did not see was that the Microsoft Sharepoint Adminstration site was stopped.

So I started it up, and voila!