Hello Boki,
I have found this interesting page which may have an answer to your problem.
http://www.microsoft.com/globaldev/nlsweb/default.mspx
It says here that the definition for the Serbian Latin Locale has changed from Windows Server 2003 (and Windows XP SP2) to Windows Vista (and that may also mean to the .NET Framework 3.0:
- In Windows Server 2003 and XP the definition for Serbian (Latin, Serbia) is: sr-SP-Latn
- In Windows Vista the locale definition for Serbian (Latin, serbia) is: sr-Latn-SP
So maybe this problem is caused by mixing .NET Framework versions (through Visual Studio 2008) and Windows versions.
I suggest to try again, on a fresh Windows XP install, using only Visual Studio 2005 and .NET Framework 2.0. The corresponding locale definition would be sr-SP-Latn.
Give it a try and send us your feedback.
Saludos,
Alejandro