I had a chance to set up the VSTS 2008.
All I can share is that you need to follow the steps as outlined in this link
1. Ensure you meet all the pre-requisites
2. Ensure you follow the step-by-step guide to the letter
3. Enjoy the power of VSTS.
I love the Team Foundation Build, it makes automation of buids so basic. You have to try this!
Julius
Important!!!Please note that if you are installing VSTS 2008 on a Windows 2008 Server, you have got to download and install the Windows Sharepoint Server 3 with Sp1.Why?Because Windows 2008 server no longer installs Windows Sharepoint Server 3.0 automatically. And Windows Sharepoint Server 3.0 can not install on Windows Server 2008.For more details, please read here:http://blogs.msdn.com/bharry/archive/2007/12/13/installing-sharepoint-on-windows-server-2008.aspx