"-project coh" was the command line argument to make CoH bypass the launcher under the old CoH Launcher. It means nothing to (and confuses) the NC Launcher. Right click on your Launcher Icon, and choose "Properties". Find the "Target" field and remove "-project coh" from it. If you want to continue bypassing the launcher, replace it with "/LaunchGame=CityOfHeroes".
Not sure about the "virtual store folder" error, but making the change I mentioned should at least let the Launcher fix the problem itself.
@Roderick
I had the game create a new desktop icon and checked the properties the target is /launchgame=cityofheroes and it has the same thing about the vitual store
Fixed
The coh folder got marked as hidden and it would not alow the game to delete the file.
after removing the hide flag it let it 
woooot
Any Idea why I am all of the sudden getting this error message when I run the launcher ?
The NClauncher has detected a windows virtual store folder for city of heroes and an install in program files. The nclauncer would like to remove the folder in your virtual store: not removing this folder could cause errors. Can nclauncher remove the folder below.
I have tried letting it remove the folder and also telling it no. Both ways I then get a message saying
error parsing command line argument XXXXXXXXXXXXX -project coh
if I click ok it will then goahead and load the game.
Any Ideas what I did to caues this and how to fix it ?
thanks