I just got the VSTF December CTP up and running. I had one little issue I figured I would post.
After first setting up the client I attempted to connect to TFS. I was logged in as the Administrator on the local box (yeah, yeah I know. I was just trying to test the setup and hadn't created users yet.). I couldn't connect to TFS. It was at this point that I realized that it was probably because the local administrator wasn't a member of the TFS Adminstrators group in ADAM. So I logged in using the TFSSETUP domain account which the docs tell you is added to TFS Administrators and tried to connect. Still couldn't connect. At this point I was fairly sure everything else was correct. I could browse to the bisservice/registration.asmx page, etc. It finally dawned on me however that TFSSETUP had no privileges on the local box! I added this domain account to the local administrators group and voila! everything worked. Hopefully this saves someone else some grief.