In the server planning document we state:

 

Virtual PC

Team Foundation Server servers will operate correctly on a Virtual PC or a virtual server. However, this configuration is not recommended for production environments. It can be used in evaluation or demonstration scenarios.

 

Since i have been advocating that customers DO use Team Foundation Server under some sort of Virtual Enviroment i had a couple of customers ask me about this mismatch. 

I checked with the dev team and apparently this recomendation was made for performance reasons. 

 

That being the case contrary to the documentation i still recomend your Team Foundation Server run in a virtual enviroment for backup and recovery reasons.   For more information on the normal backup/recovery please see:

 

How to: Back Up a Team Foundation Server 

How to: Restore Team Foundation Server Data