As an iPhone developer, Xcode and iPhone Simulator are the two most frequently used pieces of software of all. When they don't work as expected, I feel really frustrated. And frustrated it is when I found that iPhone application (running on iOS 4.0) doesn't quit automatically when I try to deploy and run an updated version of app from Xcode (Build & Run by hitting Command+R). But the existing running instance enters background instead of terminating as it should. As a result, the application is update on the simulator, but the running instance is out of date. That issue made developing and debugging very difficult.
It's only yesterday that I found out File Vault was the immediate cause of this. My solution was creating an new account and start over.