Since I am a tester on the Test edition of VSTS - I get this q a lot of times: "Do you use VSTST for testing VSTST?" And the answer is "You bet, I do!" :)
As you might know already, this is called "Dogfooding". Many Microsoft products are dogfooded extensively before release - Vista, MSN Search, Visual Studio, Team System...
Our devs use unit test types to write their developer regression tests. Our QA team uses unit tests to write our functional tests. Yes, I know this is not a perfect fit for UI heavy testing, but it does suffice for the time being. We use generic tests to wrap our legacy tests that may be scripts or batch files. Load tests are added to the test bed to do stress testing on the app. All of this goes into the TFS server that we have deployed for the entire Developer Division and testing performed out of it.
Like any other user, I have my own set of pet features and pet peeves in TST. I absolutely love the code coverage coloring, the "Run test" from the editor (Orcas feature), the ease with which load tests can be configured and the controller-agent functionality. It makes my life so much easier as a tester. Not to mention that it's incredibly easy to point out to devs where the problems are and associate results with bugs since we use TFS for work item tracking. Now for the bad parts - I think the test list feature is absolutely useless for large test projects. The UI confuses me - more than once, I have selected a test in the window, right clicked and said "Run checked tests", but some other tests start running!! That's because selecting a run is not the same as checking it. :( I have a wishlist as well - stuff like test case management being easier to handle, the test run results being easier to analyze etc.
The best part of dogfooding is that this is a good chance to know which features are likely to be real relief and which ones are mostly going to tick the users off. Testers being the first customers of the tool is literally true in this case. Plus the QA team gets additional testing in the process so that bugs/suggestions are filed before outside users get a chance to go at it.
So, do you eat your own dogfood? ;-)