There was a lot of great things showcased during the first day of the Microsoft PDC 2010 on Oct 28, from development on Windows Phone 7 to new features available to Windows Azure.
What was really neat to watch was Brian Harry up on stage during the keynote and talking how they got TFS to work on Windows Azure. Right after this talk, he posted the following article about TFS on Windows Azure at the PDC. I highly recommend you check out his article for further details.
How is this going to be licensed? I assume since TFS is free you will just pay for your Azure cloud service and be done. Brian always likes a challenge so I am not surprised that they jumped alll over this. Cool stuff.