TFS is an Application Lifecylce Management Tool not ONLY a source code repository / versioning system.
It's strength's are:
-It's natural integration into Visual Studio (+100)
-It's Full App Lifecycle support from Work Item through Q/A acceptance.
-It's integration with MS Project / Sharepoint, and all the other
hoo-ha's you get
-And now TFS 2012 has added support for "Local Workspaces" which allows
for off-line working, but also allows "Server Workspaces" which is
similiar to TFS 2010.
-Diff on every Check-in / Commit
The Source control side of it is also very strong, however, personally, as long as I can see the entire history, not lose code, and not have my code "stepped on". I could give a darn.
I've been using TFS since 2008 and the latest round of improvement further demonstrates Microsofts commitments to evolving their products and keeping up with industry changes. Personally I love it, but i stay in the Microsoft environment (which i also love).. outside of that, it may not work with everyone's needs.
Now, a few days into working with Mercurial professionally (BitBucket / Mercurial / tortoiseHG / VisualHG ) , i have to say the tools seem a bit dated. The integration with Visual Studio is like luke warm coffee (ho-hum), and the explorer integration takes me back to "the good ol days" when i was lucky to NOT be working on Visual Source Safe.
Another thing to take note of is the ease in migrating from Visual Source Safe into TFS, it's fairly painless.. i recently moved my last companies entire history in VSS into TFS and it just took a couple command line utils and overnight to get all the change history moved over. I was shocked (as where my colleagues) at how easy the migration was, it even kept all the history since the beginning (by request of the powers that be)
I'm definitely biased having worked with MS tools for a long time, but there's not much to source control as long as it works..
If your organization wants to truly manage all aspects of application development, and they haven't got integrated tools or processes yet, TFS will afford them the ability to grow and manage from the get go.
Start with Source Control, end up with specs originated in MS Project, tied to work items tied to Unit Test tied to acceptance tests tied to automated builds and deployments
And Lastly: Burn Down / Velocity Charts