Also, setting all projects' output folders to the same directory is a pretty bad idea. You're presumably doing parallel builds (/m). If so, and two projects depend on the same library but at different versions, which version will go into your output folder? Depends which project happens to finish building last. That's non-deterministic. Boo. What if the versions aren't even API-compatible? (e.g. Some of your test projects are still on NUnit 2?)

Using hard links gives you most of the speed up, but without the attendant issues.