I've been setting up Team Foundation Server 2008, so we can try out the benefits of the source control, management and testing facilities. I do have some quick tips as it has taken some digging around to find a smooth installation process. Starting with a blank Windows 2003 Server machine:

Pre-requisites

1. Install .Net Framework 2.0.
2. Install IIS without FrontPage Extensions 2002.
3. (If you are configuring e-mails from this machine) Install SMTP service.
4. Install everything on SQL 2005 , as you'll find it won't install without them.
5. Install SQL 2005 SP2.

Pre-requisite configuration

1. Make sure all of the SQL services are set to automatic startup and are running.
2. Make sure you have allowed local & remote connections on the TCP/IP protocol.
3. Configure your SMTP server to allow connections from this machine by configuring the Relay and Connection parts of the dialog.
4. Create some users:
   1. TFSSetup - Add to Administrator privileges
   2. TFSService - Add "Log on as a service" policy.
   3. TFSProxy - Add to Administrators group
   4. TFSReports - Allow log on locally.
   5. WSSService - log on as a service.

Main installation

1. Install Team Foundation Server 2008. When prompted to run the service as a specific account, enter your credentials for the "TFSService" account.
2. Install all other portions using the server account.
3. Set up e-mails to point to your e-mail server.
4. When prompted to install the Sharepoint services, accept the default settings.

The installer should then install 3 portions:

1. .NET Framework 3.5
2. Windows Sharepoint Services 3.0
3. MS VS2008 Team Foundation Server

And thats it. I encountered TF220059 and TF220060 errors, but these were just SQL problems where remote connections and services weren't started. If you follow the steps above, you should get this problem.