"The process cannot access ..." when using MSBuild

I am so close to getting my TeamCity setup complete, but am stumped by this error:

(12/22/2011 2:30:15 PM) An error occurred when the request was processed on the remote computer.
An error was encountered when processing 'Web.zip'.
The error code was 0x80070020.
The process cannot access 'C:\Inetpub\wwwroot\Deneb\Website\obj\Deploy\Package\Web.zip' because it is being used by another process.

I tried deleting that file myself, and didn't have any problems. I am able to deploy this site from another server, also without any problems. I set the Team City build agent service to run as administrator, and restarted the service.

Any help would be greatly appreciated - thanks!

Realized that the checkout directory shouldn't be set the same as the web directory