Enable Source Control Caching for TFS Proxy 

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You can easily Configure Team Foundation Server Proxy to manage a cache of source control files for the Team Foundation Server application-tier server by editing the Proxy.config file on the proxy server.
1. On the Team Foundation Server Proxy computer, open Windows Explorer, and locate the proxy installation folder
2. Open the Proxy.config file in a text or XML editor
3. Locate the <Servers> node, the <Server> element, and then the <Uri> element
4. Locate the @H_TFSSERVER@ token and replace it with the URL for your Team Foundation Server application-tier server. Append the URL with a colon (:) and port "8080."
5. For example, the following line describes what the <Uri> element might look like after you make the appropriate substitution:
Proxy.config
7. Save and close the Proxy.config file.
The Proxy.config file is located in the proxy installation directory (The default proxy installation directory is …\Program Files\Microsoft Visual Studio 2005 Team Foundation Server\Web Services\VersionControlProxy)