Note: This post is relevant only to Dual server configurations of TFS.
Many customers have asked me if TFS Setup account needs to be Administrator on TFS Data Tier. For Orcas the answer is "NO". Let me provide some details on this topic.
In VS 2005 we had a DT SKU that was installed on DT machine. Therefore you had to be administrator to install the DT SKU. Based on tons of feedback we got from our customers we removed that SKU in Orcas and now you just have 1 SKU or installer for both single server and dual server setup. The advantage is you do not need to be administrator to install TFS in dual server environment. You still need to be a SQL Administrator so we can create TFS databases.
Following are tasks we perform as TFS Setup on the Data Tier machine.
Hope this provides some more understanding around TFS Setup account.