So after having used a number of VPC images with Visual Studio Team System and Team Foundation Server of the Beta and Release Candidate bits, I decided that I'd finally take on actually installing the final (RTM) Team Foundation Server bits on one of my machines. So I downloaded the Workgroup edition from MSDN Subscriber Downloads, and away I went.
Per the notes on the subscriber downloads page, I started by installing an instance of SQL Server 2005 Standard Edition. Then once that was complete, I kicked off the Team Foundation Server install.
One thing I was immediately impressed by was the health scan that TFS setup runs, to alert you to a number of conditions (required services not running, necessary patches not installed) that would prevent setup from succeeding. Probably saved me (and may save you) from hours of pulling out your hair.
One thing that did trip me up a bit, but was easy enough to fix, is that when you install Windows Sharepoint Services 2.0 with SP2, which is required by TFS, you need to install it in server farm mode, so that TFS can configure it to use the same SQL Server install used by TFS. By default WSS 2.0 uses an MSDE database, which won't work with TFS. Of course, had I read the TFS installation guide, I'd have known this, and not wasted my time uninstalling and reinstalling WSS (and if you run into this, don't forget to uninstall the WSS instance of MSDE, or you won't get the option to do a server farm install when you re-run the WSS 2.0 setup).
Needless to say, given my experience, I highly recommend that you read the Team Foundation Server installation guide before attempting to install TFS.
Once having got that out of the way, the installation went quite smoothly. I also installed TFS Build and Team Explorer, and both went off without a hitch.
While I'm on the subject of Team Foundation Server, you might be interested in a beta of a utililty available for download from the GotDotNet CodeGallery that allows you to manage users, permissions, etc. for WSS, TFS, and SQL Reporting Services in one UI. It's available here.
There are also some resources available for migrating from other SDL tools: