You're not alone! We have used both, mistakenly starting with the MSF Agile 5.0 template. If you are using Scrum specifically, I would use the Scrum 1.0 template. The Scrum 1.0 template was created with Ken Schwaber, one of the founders of Scrum.
The MSF Agile 5.0 Template contains workbooks which allow a lot of control over reporting data using excel. But, there's many more disadvantages. It doesn't have a release burndown report. In order to produce a usable sprint burndown, you need to record actuals in your tasks. The product backlog is hard to keep groomed. The user story is the only backlog item, so tracking engineering spikes or non functional requirements are awkward.
The Sprint 1.0 uses a "Sprint" workitem type which makes velocity and burndowns a snap.
So, as far as tools go, it's pretty good.
