The HR result says "Application can not be run more than once". There are no other esri apps running (or other visual studio instances). I even rebooted the machine to make sure that there were no background processes.
At ArcGIS 10 you have to bind to a product before attempting to check out a license. At the top of this page is a Help link. Follow that to the SDK help and there is a help topic on migrating your code to ArcGIS 10 that should help you.