I suppose this can serve as a public service announcement. I recently tried to upgrade my TFS 2005 server to TFS 2008. I found a nice document that will guide you through the steps necessary to make this leap. The upgrade was seamless and took less than an hour total time. I must commend Microsoft on this. Once upgraded, I realized that the license that I was able to download from my MS Gold Partnership download center was the workgroup version. This means that a maximum of 5 developers can be licensed to use the product. Unfortunately, I have about 15 developers that need to use the product. Luckily I realized this on my practice deployment on a Virtual machine.
Lesson learned: Before upgrading software, check the license that you have.
UPDATE [7/4/2008]: Turns out that the Gold Partner Status gives 25 users. Just to make sure you explicity choose to download the non-workgroup version of the software. The download is 3 times the size.