Yes it can be done. Do you find yourself hard pressed to purchase new hardware for a Visual Studio Team System setup? The normal requirements for a multi server setup for Team Foundation Server involves a domain controller, a SQL Server machine and a TFS server. For those that don't have the physical hardware, Virtual PC or Virtual Server can be your saving grace.
We all know that buying RAM is cheaper than purchasing complete computers. Max out your high end PCs with RAM and run multiple servers on one box.
You can host a single server install of TFS on one virtual machine, or you can split your virtual machines into the required roles and install the system that way. Note that I don't recommend running your domain contoller in a VM unless you are certain it will always be available, (ie you won't shut it down).
To install Team Foundation Server in either a single or multi server environment, follow the guidelines and checklists found in the TFSInstall.chm which is included with Team Foundation Server.
If you want some training on Team Foundation Server, visit http://www.microsoft.com/learning/syllabi/en-us/2631afinal.mspx and search for training centers and delivery schedules at the bottom of the page. Note that this offering is an instructor led workshop. Workshops are different than your standard instructor led course in that they expect a certain knowledge up front. Ensure you meet the pre-requisites listed prior to signing up for this workshop. The workshop covers roles ranging from Project Manager, to Architect, to Developer and Tester. Check with your local Microsoft training partner for particulars on how you fit into the workshop.
If you are the self-paced syle student, MSPress has an offering found here, http://www.microsoft.com/MSPress/books/8477.asp, that will speed you on your way to understanding Visual Studio 2005 Team System.
Whatever your decision, I'm sure you will find lots of good in VSTS, and lots of challenges.
MSL is taking over the blogosphere!