A week or two ago I applied Visual Studio Update 1 on my main development machine and I ran into a problem with my Windows Phone emulator. Since it took me most of a morning to find the solution, I thought I'd post it here to give it a little more Google juice and hopefully save others some time.
Before the update, I could launch a Windows Phone 8 project and it would run in any of my Windows Phone 8.1 emulators (I have several installed). After the update, the device selector in the Visual Studio toolbar didn't list my 8.1 emulators anymore (the only option was "Start"), and every launch would fail with HRESULT 0x89721800.
I reinstalled the emulators and did a repair installation of Visual Studio to no avail. I also found some posts suggesting that having Apache Cordova installed might be causing this, so I uninstalled that - still no luck. Eventually I found this TechNet article about a similar problem with Windows 8.1 Preview suggesting that this might be an issue with a corrupted Visual Studio data store.
The solution ended up being similar to Workaround #1 in the article, except that instead of the "10.0" folder, I needed to delete "%LOCALAPPDATA%\Microsoft\Phone Tools\CoreCon\11.0". After deleting that folder and restarting Visual Studio, everything worked just as it had before the update.