With Team Foundation 2008 generally available, I've seen a bit of confusion over the various Editions offered. Of course, there's still a bit of confusion over how "Workgroup Edition" relates to workgroup networks, but there's also some missing clarity around the upgrade paths, the restrictions, etc. Hopefully this simple guide will help make the Edition story a little less obtuse.
Believe it or not, we have four Editions, or so they tell me.
For all intents and purposes, 3 and 4 are the same. The only difference is how you obtained them, and whether you have to fill in the PID yourself or if it's already filled in. Both are fully functional and should have no timebomb or user limit restrictions.
The Trial Edition has a 90 day timebomb, but is otherwise fully functional.
The Workgroup Edition has nothing to do with domain versus workgroup network deployments. Rather, it's a version you get with an MSDN subscription that has a five user limit. It's my understanding that it may only be installed in a "single server" configuration.
Supported upgrade paths are from Trial to Workgroup, Trial to Retail or Volume License, and from Workgroup to Retail or Volume License. Brian Harry has a great post on how to upgrade.
I hope that helps- if not, let me know and I'll see what other information I can dig up!