Others have mentioned the specific benefits of source control elsewhere, but I wanted to explicitly address the "VSS" portion of the question.
If your boss wants to use a Microsoft tool, Team Foundation Server with Team Suite is a very nice combination. It also has other tools included, such as bug tracking, documents, and reporting capabilities, which makes a nice platform on which to later improve your process. We are quite happy with it where I work, and my coworkers have told me horror stories about VSS.
Keep TFS in mind as a response to the 'Microsoft Tools' question.
