You said you where developing a Windows application, not a web site.
I suspect even if you where developing a web site you would still have to place the DLL in the GAC (there is a tool for doing this by the way, called gacutil.exe).
As to WHY that is I wouldn't know - only the developers would be able to tell you why they added that restriction.
/- Sam Judson : Wrox Technical Editor -/
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