The coming weeks, I am going to have a look at the latest Beta of Visual Studio 2008 Team Foundation Server and Microsoft has done all it was possible to make it easier (or almost).
First, they released Virtual PC hard drives (vhd) with all the software included. So, as I have the luck of having a MSDN subscription, I first downloaded the 9 parts of the VHD file. Yes ! A total of 4.2GB to download, taking the whole night to get it. But, once deflated, it takes more or less 13GB ! That's ok for me, on an external 420GB hard drive, I can afford it.
The only problem I had was that when I launched the VPC image, it simply failed, telling me that "The parent virtual hard disk has been deleted or has been moved from its previous location. Please select the new location of the parent virtual hard disk". That was strange, because, on the MSDN subscriptions site, there is no mention about a parent virtual hard disk. Or, at least, not enough visible for me.
To solve this little issue, it is better to download the VHD from the Microsoft download site. There, you have all the instructions you would need, and, the most important, where to download this parent virtual hard drive.
Link to the Visual Studio 2008 Beta 2 Team Foundaction Server download