Long discussion on why you should absolutely have source control:
Is Version Control necessary for a small development group (1-2 programmers)?
My comments from that thread:
You always, always want to have some
sort of Source Control even if you are
working on a project by yourself.
Having a history of changes is vital
to being able to see the state of a
codebase at any given time. There are
a variety of reasons for looking back
in a project history which range from
just being able to rollback a bad
change to providing support for an old
release when the customer just wants a
patch to fix a bug rather than
upgrading to a newer version of the
software.
Not having some sort of source control
is pure insanity.
As far as VSS goes - it's certainly better than nothing. It's definitely not the best source control and it's very dated, but the fact it that it continues to do the job for an awful lot of companies out there.
If your boss is determined to stick with Microsoft tools, go for Team Foundation Server instead of VSS. It's a much better system than VSS and it has nice features like integrated bug tracking.