In case you haven't heard, Visual Studio 2008 Service Pack 1 is available!
As you prepare to install the TFS 2008 SP1, I'd like to strongly recommend that you first run the BPA tool. From the Visual Studio Team System forums, I've seen two folks already have installation failures because their current system wasn't quite what TFS expected it to be. In one case, the team had modified the TFS AppPool accounts without using TFSAdminUtil so the old TFS service account that no longer existed was still referenced quite a few other places. In another case, the permissions of the TFS Setup user had been modified. I know that the BPA tool would have exposed the first issue and think it would have found the second, as well.
If you have a machine where you'll install both the VS SP1 and the TFS SP1, you should run the BPA tool before installing the VS SP1 or else you may not be able to use the TFS tools to fix any issues. This is because the two packs share several assemblies whose internal APIs may have had breaking changes between RTM and SP1. This would cause the TFS administrative tools to not function if they use those APIs.
Hopefully this will help folks avoid SP1 installation issues so you can get it up and running. It's very well worth it- I promise!