I have Visual Studio 2008 and I installed Team Explorer 2008
Team Explorer 2008 gives me the following error message when trying to connect a TFS 2010 server:
TF31002: Unable to connect to this Team Foundation Server: servername....
Visual Studio 2008 isn't 100% compatible with TFS 2010. To get some level of compatibility, you need to install an update to VS2008.
Also see this blog post about the subject.
Update to Visual Studio 2008 SP1 ... and http://www.microsoft.com/downloads/details.aspx?familyid=CF13EA45-D17B-4EDC-8E6C-6C5B208EC54D&displaylang=en
This fixed it for me yesterday. But yes, there are some things that arent possible, like create Team Projects and maybe some other things.
When you put the URL into the Server Name Dialog Box, make sure that you do not have a trailing backslash, if you do, you will have issues thaqt are indicated by a message as follows:
Unable to switch servers at this time. Team Explorer is Busy.
Hopefully, this will help someone else, we spent about two hours before we finally stumbled upon this issue. (Seems like a bug to me).