On my PC (fresh install of CC.NET 1.5.7256.1) the build report looks like:

  BUILD SUCCESSFUL
  Project:      Integration Sample
  Date of build:        2010-06-18 23:32:22
  Running time:         00:00:03
  Integration Request:  Build (ForceBuild) triggered from WS2008
  Modifications since last build (0)
  Warnings (1)
  PersonTest2.cs (27,11): warning CS0219: The variable 'a' is assigned but its 
value is never used

After treating warnings as errors in the project settings, the output is:

  BUILD FAILED
  Project:      Integration Sample
  Date of build:        2010-06-18 23:36:34
  Running time:         00:00:01
  Integration Request:  Build (ForceBuild) triggered from WS2008
  Modifications since last build (0)
  Errors (1)
  PersonTest2.cs (27,11): errorCS0219: Warning as Error: The variable 'a' is 
assigned but its value is never used

Could you try reinstalling CC.NET or try it on another PC?

My MSBuild section of the project looks like yours,
and I can't think of any logical reason for not working on your project.
Of course, there is a very small chance of an over-active anti-virus software
or some lack of free space on disks, but it's a very small chance.

Have a nice day,
  Eduard

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