Error: The Side-by-Side configuration information for “YOUR.DLL” contains errors.

After migrating your ATL project to Visual Studio 2005, you suddenly receive following error when distributing your application to other computers:

LoadLibrary("yourdll") failed: This application has failed to start because
the application configuration is incorrect.
Reinstalling the application may fix the problem.

Bummer.

Opening up the dll with Dependency Walker gives following error message:

Error: The Side-by-Side configuration information for "YOUR.DLL" contains errors.
This application has failed to start because the application configuration is incorrect.
Reinstalling the application may fix this problem (14001).

The problem lies in the fact that Visual Studio ships with ATL 8.0 dll, and this requires a manifest to be delivered together with the ATL80.dll.
A simple solution was to include both ATL80.dll and Microsoft.VC80.ATL.manifest into the installer, and copy it into the same installation directory as YOUR.DLL.
Both files can be found on following location on a standard Visual C++ installation:
C:\Program Files\Microsoft Visual Studio 8\VC\redist\x86\Microsoft.VC80.ATL