I found the latest TFS 2008 Installation Guide document (dated September 8th, 2008) a bit lacking in that it walked you through the entire single server installation but forgot one crucial step!  I hope the team will update the documentation soon to reflect this one important step that will save you tons of time trying to figure out what’s going on if you’re not familiar w/ how Windows Server 2008 and SQL Server 2008 work together, especially in regard to Reporting Service.

The installation will go through smoothly enough when you follow the guide.  Your best bet is to follow the Checklist: Single Server Team Foundation Server Installation page in the Installation Guide.

Just make sure you have TFS 2008 and TFS 2008 SP1 slipstreamed before you proceed with the install.  You need to do this if you are using SQL Server 2008.  To do this, follow the steps described in the Installation Guide titled: How to: Integrate the installation of Team Foundation Server and Service Pack 1 or follow the Fresh Install instruction in this blog post.

If you plan to use SQL Server 2008 SP1, make sure to make the necessary changes described in this KB or you won’t  be able to proceed with the TFS installation.

Some instructions in the Installation Guide are a little confusing.  For example, it talks about different types of accounts necessary for the installation, but during the installation of TFS, it will blindly tell you to use the same account (Step 12 and 14 in the How to: Install Team Foundation Server page).  In this case, you will only need 2 accounts really, which is TFSSETUP to run the installation and TFSSERVICE to run all the services including WSS and Reporting Service rendering TFSREPORTS and WSSSERVICE account useless / unnecessary.  Just give TFSSERVICE the Allow log on locally and Log in as a service permission and you’re set to go.

One common error that you are going to get once you are done with TFS installation steps is a reporting service error stated below:

“The permissions granted to user ‘…' are insufficient for performing this operation. (rsAccessDenied)”

You’ll get this when trying to access the report service from the browser (i.e. http://localhost/reports).

Now, this is the missing step which is not in the installation guide (I hope they’ll add this in soon)…You need to configure report server for local administration on Windows Server 2008 properly to get rid of the rsAccessDenied error.  To do that, followthis MSDN article.  Once you are done with this final step, your TFS 2008 should be working just fine on W2K8 and SQL 2008.

So, in summary:

1. Please make sure your W2K8 installation is 32-bit!!!
2. Please make sure TFSSETUP / its equivalent account is a member of the local machine Administrators group.
3. Please login as the TFSSETUP / equivalent account before you do the installation (after it’s assigned as local administrator).
4. Please make sure to slipstream your TFS 2008 media with TFS 2008 SP1 before the installation
5. Make necessary changes per KB 969985 if you are going to use SQL 2008 SP1
6. Properly configure Report Server for Local Administration post TFS installation

As a side note, although installing TFS 2008 on single server 64 bit windows, such as W2K8 R2 that is just released, is not currently supported by Microsoft, apparently it is doable.  See this blog post for detail.