There is some problem with VSSConverter documentation at http://msdn2.microsoft.com/en-us/library/ms181247. It has some bogus <i> </i> inserted in all XML snippets. For details on how to migrate see Akash's blog.

If you are just stuck on settings file you can use following settings file.

<?xml version="1.0" encoding="utf-8" ?> 
 <SourceControlConverter>
 <ConverterSpecificSetting>
            <Source name="VSS">
                  <VSSDatabase name="e:\myrepository"></VSSDatabase>
                  < UserMap name="e:\Migrate\Usermap.xml" />

<!-- uncomment it if you want to specify a SQL server by default we use SQL express installed on you system -->
<!--    <SQL Server="my sql server" /> -->
            </Source>

 <ProjectMap>
  <Project Source="$/my folder1" Destination="$/my Team Project/my folder1"></Project> 
<Project Source="$/my folder2" Destination="$/my Team Project/my folder2"></Project>
<!-- u can add more mappings depending on number of folders you want to migrate -->
 </ProjectMap>
  </ConverterSpecificSetting>
 <Settings>
   <TeamFoundationServer name="My TFS name" port="8080" protocol="http"></TeamFoundationServer>
<!-- assuming your server is set for http protocol and port is 8080 change this according to your install -->
<!-- you can specify the name of output report file here. it should be an xml-->
<Output file="VSSMigrationReport.xml" />
  </Settings>
</SourceControlConverter>