We changed the build agent setup such that the default presented in the setup GUI is to use Network Service as the build service account.  One big advantage of doing this is that the Network Service account doesn't have a password that expires, removing one annoying administrative issue.

Once you install the build agent, you need to add the service account to the Build Services security group for the team project where the build definition resides.  That's all explained in the installation guide and other documentation.

In beta 2, however, the Network Service account for a computer cannot be added to the Build Services group using the Visual Studio 2008 GUI (normally, you would right-click on the team project, choose Security, then Group Membership, and add your account to the group).

We have fixed this issue for the final release of TFS 2008.  You can find the workaround of running tfssecurity.exe in section 2.7.4 of the TFS 2008 Readme.

Jim pointed out to me this morning that the readme link on the installation media for beta 2 takes you to a page that does not have this workaround listed (that'll be investigated, too).