As you can see from here there is a nasty error that pops up when you try to create a new team portal site from Visual Studio 2005 which is connecting to Team Foundation Server 2008.
If you look at the error log the problem is as follows:
Event Description: TF30162: Task “SharePointPortal” from Group “Portal” failed
Exception Type: Microsoft.TeamFoundation.Client.PcwException
Exception Message: The language id specified in the process template does not exist on the WSS server.
VS2005 will show you this:
“The language id specified in the process template does not exist on the WSS server”
On the weblog referenced above the hot fix indeed works, but most of the comments indicate it is not.
Here is the solution:
YOU must reinstall Visual Studio Service Pack SP1 before applying the Hotfix.
This problem happens because VS2005 SP1 was applied before installing the VS2005 Team Explorer Client.
So the version of the dll that is causing the problem is:
Microsoft.VisualStudio.TeamFoundation.TeamExplorer.dll -> 8.0.50727.147 - this version is not what is expected by the hotfix.
After you apply SP1, the version of this dll is correct, and the hotfix will work, and you will be able to connect to TFS2008 from a VS2005 Client.
Everything should work now.