Solution to localhost problem (at least on my computer)
OK, I figured out how to fix this. I use a proxy server for my internet access, but I'm trying to do my web development locally. In Internet Settings > LAN Settings there's a checkbox labeled: "Bypass proxy server for local addresses". I checked the box, and the problem went away.
You can get to this checkbox a couple ways:
1. Start VB.Net. Select Tools > Options from the menu. Select Projects > Web Settings from the tree on the left. Click the button labeled Connection Settings. The Internet Properties dialog will appear. Click the Lan Settings button. Check the box at the bottom of the screen labeled "Bypass proxy server for local addresses". Click OK three times to get back to the development environment. You should now be able to open a new ASP.Net Web Application project.
or
2. Run Internet Explorer. Select Tools > Internet Options from the menu. Click the Connections tab. Click the Lan Settings button. The checkbox is at the bottom of the screen. Click OK. Run VB.