Everything you want to know about Visual Studio ALM and Farming
Brian Harry is a Microsoft Technical Fellow working as the Product Unit Manager for Team Foundation Server. Learn more about Brian.
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I don't expect too many of you will try this given that this is a Beta 1 release and there's no broad go-live license or support associated with it, but for those of you out there that are interested, I've got some useful information for you. Upgrading a TFS 2008 server to TFS 2010 Beta 1 should work (upgrading TFS 2005 won't work until Beta 2). However, once you've done the upgrade, you still have the old TFS 2008 process template for all of your already created projects. This means that some of the new TFS 2010 features won't work because they rely on changes to the process template or other artifacts in projects that won't be there for upgraded projects.
We've written a blog post on the manual steps you can take to upgrade your existing projects to take advantage of new TFS 2010 features. It's written in the context of the 2008 MSF Agile process template but the basic concepts can be applied regardless of what process template you used to create your projects.
Check it out here: http://blogs.msdn.com/allclark/archive/2009/05/15/enabling-new-features-of-visual-studio-team-system-2010-beta-1-in-upgraded-projects.aspx