Delete local file: <local file>?

This warning has the following cause and solution:

• You have Smart Mode turned on and are attempting to delete a file from a project.  VSS is offering to delete your local copy as well.

  Click Yes to delete the local copy.

  Click No to leave the local copy.  The copy in VSS will be deleted.

  To turn off Smart Mode, go to Tools, Options, Local Files tab, and deselect Remove local copy after delete.