You can connect to hosted TFS (Team Foundation Server) from Visual Studio 2010. But to do that you need to install the patch along with Visual Studio 2010 SP1. The patch is available at
After that it is very simple. Add the URL
After that it will ask for the login. So pass your Live Id.
Bingo, you are done.
Note. This is preview release and you get only one Team Collection.
Our team were looking for a TFS hosted solution and evaluated TFS Preview. All looked great, but our manager insisted that we should migrate all the VSS data into TFS, plus, some of our team members are used to the add-on Urban Turtle, so we had to look away. After evaluation, we chose Dynamsoft TFS hosted. Up to now, it seems fine.