To fix this SQL Server Management Studio 2008 Bug, please follow the directions below:
- Open SQL Server Management Studio 2008
- Connect to the database server as normal
- Press F7 to open the "Object Explorer Details" window
- In the object explorer details window expand double click on "Databases"
- Right click on the header bar ("Name", "Recovery Model", etc) and deselect "Collation"
- From the object explorer, refresh the "Databases"