We are extremely happy with not only the tools, but the integration that Team Foundation Server, and the various Team Editions have given us. We previously used Borland's StarTeam for source control and issue tracking with a 3rd party wiki, the name of which escapes me at the moment.
It came time for us to extend our licensing and support agreement with Borland, only to learn that the cost of adding users to our license and upgrading the product would cost us as much (a little more, actually) than biting the bullet and making the switch. One thing to consider is that you would normally pay for the development tools to begin with, so the cost is partially absorbed by our budget.
We also did not feel the need for getting Team Suite for every person. You might want to consider it for the developers, but other disciplines don't really have a benefit in using all of the tools in most companies.
We were able to get the appropriate team editions for twelve people, enough CALs for 50 users (for Team Explorer, Teamprise, Team Project Portals, Team Web Access), Teamprise for the five Mac Users that we have, and the Team Foundation Server software itself for under six figures. Considering that includes the developer tools that we normally would be buying, it was a good deal.
The upfront cost on new licensing also covered two years, so we could split the budget between the 2008 and 2009 fiscal years. The very important thing is to make sure not to let the licenses lapse, as the renewals on licenses cost a fraction of the initial cost and also include version upgrades.
As to the features, we are in the process of rolling out. About half of our department completed training, and I have already started migrating projects over. The development team absolutely loves the features and tight integration with their workflow. Version control is a snap, and work items (and their related reporting artifacts) are extensible to the nth degree. The fact that TFS relies heavily on bringing sanity to workflow management helps to tie in all of the processes to a level that you just can not get with multiple vendors.
My absolute favorite thing, though, is the extensibility model. Using the Team Foundation Server API, you can easily write check-in policies, write tools to interface with the system, develop plug-ins, and more. We are already seeing gains in productivity and the quality of our products through a minimal implementation.
Still on the horizon, though, is integrating Team Build. I have yet to set up a build project, but it seems to be seamless and painless. Time will tell... :-)
Edit - I forgot to mention that our migration to TFS includes licensing for the Test Load Agent. The load testing functionality within Team Test is one of, if not the absolute best that I have seen.