My workplace is planning on moving to Team Foundation Server and it's not a moment too soon - anything to get away from the cancer that is Visual SourceSafe.
However, I must ask - is the source control in TFS significantly different (and better) than VSS or is it just a "beefed up" version of the same thing?
I ask this now since this is probably my last window to suggest something like Subversion.
TFS source control is backended with SQLServer. I've used CVS and SVN in the past and TFS source control provides me with everything I need. Note that I don't do a lot of branching, mainly straight-line development with tags for releases. I have used it with multiple developers and I like the merge features -- side-by-side GUI allowing me to choose which version of conflicts to apply. I haven't run into any insoluble problems yet. I'm happy enough that I'm not looking for anything else. I much prefer it over VSS.
I don't have first hand experience with TFS, but I've used both source safe and svn. From what I've read, your answers are yes, and yes. You can definitely feel the source safe history, but at the same time it's a modern system with the features you'd expect and then some (it does a lot of project management stuff too).
For starters you can have multiple persons have the same file checked out (however there is still the option to exclusively check out as well).
The storage is database driven, instead of file driven. For me this has made searching the codebase harder, but it allows far easier merging and annotations (who wrote this line of code?).
TFS is much more than just source control as well. Task management, check-in policies, the list goes on
I have first hand experience with both TFS and VSS. About the only commonality between TFS and VSS is the icons used in solution explorer to display file status.
TFS is an excellent source control and project management solution. It can support agile practices and comes with support for CI and testing. Backed by SQL it is robust and fast. You can have SVN style access if you want using SVNBridge. It scales awesomely, and copes with huge projects. The TFS team actually dogfooded this one to great success. Its main downsides are cost, and learning curve.
VSS is probably the worst attempt I've ever seen at source control and I think one would be better off using a nightly zip file backed up on an old tape drive than use VSS.
We've been using TFS for the last 18 months, and like many products the first version left a bit to be desired (one of the favourites of TFS 2005 was not to get latest when it said it had, resulting in many build breaks).
However now we're on TFS 2008 SP1 it works exceptionally well. The source control system is fast and intuitive, and integrates seamlessly with Visual Studio. For things like renaming, moving, branching and merging it easily surpasses other tools such as Subversion in terms of how well it tracks things and its ability to merge branches.
In spite of what anybody says, there simply is no comparison between TFS source control and VSS. And you don't have to worry about your repository getting corrupted either!
The only problem that still seems apparent is that every couple of weeks TFS slows down and getting latest takes ages, requiring a restart of the SQL Server to fix. I don't know why this is.
Sourcesafe is recommended for teams of five or less.
TFS is dogfooded by MS, in that they are using it for an ever increasing number of projects and in the thousands of users. There's lots of details of why it's more robust but this should illustrate the paradigm step between the two.
I've been using TFS since early 2006 and all faults I've discovered are PEBCAK. It is extremely reliable.