Team Explorer RTM has issues with VS2008 SP1, you get the error:
Could not load type 'Microsoft.TeamFoundation.WorkItemTracking.Client.WorkItemTypeDeniedOrNotExistException' from assembly 'Microsoft.TeamFoundation.WorkItemTracking.Client, Version=9.0.0.0, Culture=neutral, PublicKeyToken=b03f5f7f11d50a3a'.
whenever you go near work item tracking.
I got into this state by installing Team Explorer after installing VS2008 SP1. The visual studio service pack also updates Team Explorer if it finds it installed, however if you install Team Explorer after the service pack you'll have the RTM version of Team Explorer and the SP1 version of visual studio who don't play well together.
Running the VS2008 SP1 install for a second time will patch Team Explorer up to the required level.