I am trying to publish an Asp.net MVC web application locally using the NAnt and MSBuild. This is what I am using for my NAnt target;
The "Publish" target you are trying to invoke is for "OneClick" deployment, not for publishing a website... This is why you are getting the seemingly bizarre message. You would want to use the AspNetCompiler task, rather than the MSBuild task. See http://msdn2.microsoft.com/en-us/library/ms164291.aspx for more info on this task. Your "PublishDir" would correspond to the TargetPath property of the task.
Source
I came up with such solution, works great for me:
msbuild /t:ResolveReferences;_WPPCopyWebApplication /p:BuildingProject=true;OutDir=C:\Temp\buidl\ Test.csproj
Secret sauce is _WPPCopyWebApplication target.