What this means is VC thinks you have no SCC connection at all, your files are just on your disk. You need to change the default NiftyPerforce settings so that it checks out files for you when you edit/save etc.
Advantages of NiftyPerforce without P4SCC :
1. Much faster startup / project load, because it doesn't go and check the status of everything in the project with P4.
2. No clusterfuck when you start unconnected. This is one the worst problems with P4SCC, for example if you want to work on some work projects but can't VPN for some reason, P4SCC will have a total shit fit about working disconnected. With the NiftyPerforce setup you just attrib your files and go on with your business.
3. No difficulties with changing binding/etc. This is another major disaster with P4SCC. It's rare, but if you change the P4 location of a project or change your mappings or if you already have some files added to P4 but not the project, all these things give MSdev a complete shit-fit. That all goes away.
Disadvantages of NiftyPerforce without P4SCC :
1. The first few keystrokes are lost. When you try to edit a checked-in file, you can just start typing and Nifty will go check it out, but until the checkout is done your keystrokes go to never-never land. Mild suckitude. Alternatively you could let MSDev pop up the dialog for "do you want to edit this read only file" which would make you more aware of what's going on but doesn't actually fix the issue.
2. No check marks and locks in project browser to let you know what's checked in / checked out. This is not a huge big deal, but it is a nice sanity check to make sure things are working the way they should be. Instead you have to keep an eye on your P4Win window which is a mild productivity hit.
One note about making the changeover : for existing projects that have P4SCC bindings, if you load them up in VC and tell VC to remove the binding, it also will be "helpful" and go attrib all your files to make them writeable (it also will be unhelpful and not check out your projects to make the change to not have them bound). Then NiftyPerforce won't work because your files are already writeable. The easiest way to do this right is to just open your vcproj's and sln's in a text editor and rip out all the binding bits manually.
I'm not sure yet whether the pros/cons are worth it. P4SCC actually is pretty nice once it's set up, though the ass-pain it gives when trying to make it do something it doesn't want to do (like source control something that's out of the binding root) is pretty severe.
I found the real pro & con of each way.
Pro P4SCC : You can just start editting files in VC and not worry about it. It auto-checks out files from P4 and you don't lose key presses. The most important case here is that it correctly handles files that you have not got the latest revision of - it will pop up "edit current or sync first" in that case. The best way to use Nifty seems to be Jim's suggestion - put checkout on Save, do not checkout on Edit, and make files read-only editable in memory. That works great if you are a single dev but is not super awesome in an actual shared environment with heavy contention.
Pro NiftyP4 : When you're working from home over an unreliable VPN, P4SCC is just unworkable. If you lose connection it basically hangs MSDev. This is so bad that it pretty much completely dooms P4SCC. ARG actually I take that back a bit, NiftyP4 also hangs MSDev when you lose connection, though it's not nearly as bad.