John,

Have you manually registered the msxml3.dll?

I am guessing that you are receiving this message when you launch the
Microsoft Visual Studio .Net product.  If this is correct, I would run a
filemon and see if you see anything strange in there.  You can get filemon
from http://www.sysinternals.com.  I would be more than happy to help you
review it, if needed.  

Also, you can use dependency walker from http://www.dependencywalker.com to
see if there are any conflicts with any other DLLs that MsXML3.DLL may be
associated with in the system.

Cheers,
Tim Macaulay, MCSD, MCP.Net
Microsoft Corp.
This posting is provided "AS IS" with no warranties, and confers no rights

I have the same problem and registering the .dll file doesn't work.

From http://www.developmentnow.com/g/58_2004_8_0_0_293211/--unable-to-load-because-th
e-file-MSXML3-DLL-cannot-be-loaded-.ht