http://www.martinhatch.com/2010/05/vs-2010-rtm-and-sp-2010-rtm-deployment.html
Error Occurred in deployment step 'Add Solution': Value cannot be null. Parameter name: sFAIL
So what on earth could be causing this error? Well, I stumbled across a registry edit that enabled diagnostics logging for SharePoint projects in VS 2010 (thanks to Glyn Clough for letting me know about it).
Enable Diagnostics Logging for SharePoint Projects in Visual Studio 2010
[HKEY_CURRENT_USER\Software\Microsoft\VisualStudio\10.0\SharePointTools] "EnableDiagnostics"=dword:00000001