Web Services - Can not generate temporary class

Activation fails or you notice an error in your logs that looks like the following:

System.InvalidOperationException: Unable to generate a temporary class (result=1).
error CS2001: Source file 'C:\WINDOWS\TEMP\0kvvmynh.0.cs' could not be found
error CS2008: No inputs specified

(Note, the source file is randomly generated)

You may also see the error "'There was a problem with activation. Verify that the product key you entered is correct, and that it is for this version of [ProductName]" when activating.

Cause:

This exception occurs when the system cannot write necessary temporary files when executing web service calls.

Resolution:

Grant the user account that the web interface is running under List Folder Contents and Read permissions on the %windir%\Temp folder. Usually this is the "ASPNET" or "Network Service" user.

More Information:

http://support.microsoft.com/kb/908158