I ran the RTM version of TFS2010 on my server that has TFS 2010 RC on it and it gave me this error message.
I thought you could upgrade from the RC to the final version. Was I wrong?
No, you are correct. You have to uninstall RC first, then re-install the RTM. At some point during install you can point to your database and the install process will pick that up.
Might also be worth checking out Bryan Krieger's blog post about upgrading