Came back to work this morning to find that four automatic builds had failed during the weekend with the error message "MSB5004" which apperently mean "Error parsing the nested project section in solution file".
I had done a merge with a release branch back to the development branch late on friday with no problems and been able to build all projects without errors in Visual Studio but apperantly MSBuild reads the .sln file differently from Visual Studio 2005.
To solve my problem I compared my .sln files from before the merge and after the merge and found that one of the GUID's in the "NestedProjects" section had been changed so I just changed it back and all was good again.
I also found another solution to the problem over at Accumulative Effect.