Just released The Visual Studio Team System Project Server 2007 Connector.
Future versions of Team System will have native integration with Project Server, in the meantime this Connector solution is the best way to integrate the two Microsoft products. This solution builds on the previous PS2003 VSTS Connector, published on GotDotNet. This solution is intended to provide guidance, provided as source code that can be used "as is," extended, or modified by developers to use on enterprise development projects.
Project Server 2007 VSTS Connector