We discovered and fixed several issues that blocked some users from upgrading from TFS 2005 to TFS 2008 Beta 2.  You can get the instructions and download the two updated executables at http://www.microsoft.com/downloads/details.aspx?FamilyId=C4015D2F-2383-4270-9AAD-97129590F31D&displaylang=en.

Overview

SYMPTOMS
When you upgrade a Microsoft Visual Studio 2005 Team Foundation Server installation to Visual Studio Team Foundation Server 2008 Beta 2 you may receive one of the following errors:

• "There is no team project named' in source control"
• "TF220059: The installation process cannot continue"
  Installation will fail to complete when these errors are encountered.

CAUSE

• The first error, "There is no team project named' in source control", occurs when a Team Project is deleted and then re-created with the same name in Microsoft Visual Studio 2005 Team Foundation Server and then the database is upgraded as part of Visual Studio Team Foundation Server 2008 Beta 2 installation.
• The second error, "TF220059: The installation process cannot continue", occurs when upgrading a Microsoft Visual Studio 2005 Team Foundation Server installation configured to run using a local account to Visual Studio Team Foundation Server 2008 Beta 2. The Visual Studio Team Foundation Server 2008 Beta 2 installer incorrectly tries to contact an Active Directory instance to authenticate the local account.

more...

For those who are interested, here are a few more details on the Team Build upgrade issues fixed by the aforementioned release.

Upgrading the Team Build feature runs as the final step of the upgrade process from TFS 2005 to TFS 2008.  It fails in the following cases, causing the overall TFS upgrade to fail.

1. The customer has deleted a team project and created a new one by the same name.  This manifests as a PK violation and is recorded in the setup log.
2. The customer has deleted a team project that had builds associated with it, but v1 Team Build either wasn’t called by tfsdeleteproject.exe due to other failures or failed to delete one or more builds associated with that team project for some reason.  The upgrade fails when it tries to upgrade those builds.  This one manifests as an error looking up a team project that no longer exists ("There is no team project named' in source control").
3. The customer has inserted cycles into the project details when manually inserting builds in v1 (i.e., “fake” builds).  This manifests as a SQL recursion exception.  This problem should be quite rare.  I just included here for completeness on the known issues that are fixed.