I made a comment in my earlier posting about using Visual Studio 2005 because I was developing reports against a SQL Server 2005 instance. I didn't really make it clear why that mattered. The Business Intelligence Development Studio (BIDS) is really just a slimmed down version of Visual Studio with some added project templates for Business Intelligence projects (SSIS, SSAS and SSRS). If you already have Visual Studio installed when you install the SQL Server client tools, the installer simply adds these project templates to Visual Studio. One issue that arises though, is that the installer doesn't know anything about Visual Studio 2008, so these templates don't always get properly associated. (In my case I've been able to get the SSRS project and Report Model project templates to work, but not the report wizard)
So, to make it very clear, the officially supported toolset from Microsoft looks like this:
- SQL Server 2005 --- Use Visual Studio 2005
- SQL Server 2008 --- Use Visual Studio 2008 with SP1
This is of course all subject to change, but for now, since TFS is generally hosted by SQL Server 2005, you'll need Visual Studio 2005 to handle the report development.