Thanks to the Biztalk Forum for the answer on how to resolve deployment issues when old (cached) binding information causes errors during visual studio deploy.
On deployment the deployment program which is run by Visual Studio creates/updates one or more BindingInfo.xml files in the folder C:\Documents and Settings\[user name]\Application Data\Microsoft\BizTalk Server\Deployment\BindingFiles. There are two versions of this file depending on whether you are deploying to a new application or are redeploying.
If you deploy a new application the file is created based on reflection of the Assembly which contains the orchestration and is prefixed with a ~ (tilda) character.
If you re-deploy an existing application the binding file is created based on the binding info held in the BizTalkMgmt database for the assembly being published. This file does not have the ~ (tilda) prefix.
The deployment process attempts to apply these bindings after (re)deployment.
I have found that by deleting the Binding.Info.Xml files in the temp folder as well as deleting the Application via the BizTalk management console that the above mentioned error no longer occurs because the deployment program always uses a fresh binding.info.xml file based on the assembly and not what was previously in the database. (PS: Note that I am developing on one machine and deploying onto a second machine).