I work for a small shop that currently only has two full MSDN developer licenses. The license allows you to run the Workgroup edition of TFS. We have one running, but its a pain in the butt dealing with who gets access to it (only five seats on the Workgroup edition).
I'm wondering, since we have two MSDN dev licenses, can we host two separate instances of TFS workgroup?
Yes you can run 1 workgroup per MSDN licence. It's not great having to maintain 2 TFS installations however, but that wasn't your question.
If you have that many developers you should probably spring for a full TFS licence... It is only £2200, which sould be a minimal amount...
As I understand it, each MSDN subscription comes with a single TFS CAL. You can run TFS Workgroup for up to 5 developers without paying for a server license, but if you want more than 5 developers to connect, you'll need to buy a full TFS server license, which I think was around $5000, but then any developer with an MSDN subscription (or a separately purchased TFS CAL) can connect to it.