After recently upgrading to the Windows Azure SDK 1.5 I noticed that the compute emulator would start and then stop, effectively preventing me from running Azure worker processes locally. After some digging, I found the post below:
and what worked for me on Windows Server 2008 R2 was the post on this thread by BTMI:
Steve Marx in another thread made this observation:
"FYI, the "space in the username" issue has a decent workaround. Set the environment variable _CSRUN_STATE_DIRECTORY to some path without a space (e.g., c:\dftemp)."
Sure is a lot easier than rebuilding your profile!
It looks like this approach didn’t work for everyone, so YMMV. :)