I build applications for WM and CE devices but I have never used a software factory before. I'm not sure what you are using. Sorry I can't be of more help. :(
Its an application that allows you to easily tag projects/solutions together in a modular fashion. I.e. If I had created a project with a log-on module, I could then use this module in other projects by simply Solution > Add Project > MyLogonApp meaning that creatiion of reusable resources is easier, quicker and more effecient.
It seems to encounter a few glitches in install, and thus isn't plugging into VS 2005 properly. The other software factories are working fine, so I assume that it is a clash with another plugin, but I have no idea which one.