For the interest of other users, I'd like to add that we followed up by email and fixed it with the following instructions (it was the problem I thought it might have been):
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The source of the problem is that probably ViEmu performed its initial scan & keybinding removal without all the keybindings properly in place, resulting in an incomplete keybindings table (will be fixed in a future release).
This is the way to restore all VS2005 keybindings:
1) Disable ViEmu with Ctrl-Shift-Alt-V (so that there will be no interference afterwards)
2) Go to Tools|Import and Export Settings
3) Select "Reset all settings" and click "Next >"
4) Select a file where to save the current settings, or just "No, just reset settings" if there's nothing really you want to keep just in case
5) Choose the default settings type to which to reset all settings (I use VC++, but it's up to you)
This will restore all settings in VS2005. Now, if you go to a text edit window (ViEmu should keep on disabled), arrows should work fine.
If this is the case, what you have to do now is instruct ViEmu to remove clashing keybindings and save them for automatic management. These are the steps to perform:
1) Go to Tools|Options|ViEmu->Keyboard. There should be a pretty long list on the right hand side list.
2) Click "Save and Remove" under the right hand side list (answer yes to the confirmation msgbox)
After this, you can go back to an edit window and press Ctrl-Shift-Alt-V. Everything should be fine now, and up/down should work in insert mode, both for cursor movement and for Intellisense autocompletion.
Please let me know if something doesn't match my description above, so that we can try to fix whatever the real problem is.
Best regards,
Jon
NGEDIT Software
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Once the interception method used in ViEmu/Word is brought to ViEmu/Visual Studio (for version 2.5 or 3.0), this problem won't happen any more, as keybindings won't need to be removed at all.