While (in some ways) it would be nice to use Team Foundation Server as a source repository and work item tracker (as well as all of its other great features), TFS is a fairly costly beast (esp. for a single developer). Does any one know of any freeware / cheap Work Item Tracking tools out there? It would be great to get something to integrate with VS2008, but that's optional. (Integration with Subversion would be nice too, but maybe I should stop dreaming...)
Not familiar with TFS, but Redmine is a good, free issue tracking system which is integrated with source control (SVN, CVS and others) which is highly configurable. I have set up complex workflows within Redmine before that track from issue collection, through work approval and then work item allocation to developers. You can create any number of issue types with isolated workflows and role allocations.
Redmine is a Ruby on Rails app and runs ok on Instant Rails under Windows too, see http://www.redmine.org/
My team has been using BugTracker.NET for a few years, and we've been very happy with it. We've been using it for both bugs, as well as tasks. It's very simple, and quite customizable. It doesn't scale efficiently beyond keeping track of some 20 projects, though, due to its simplicity.
If your looking for a completely hosted bug tracking/project management software take a look at elementool. I used their bug tracking software on my last team for about 6 years and its scaled nicely over the years and has decent customization and reporting.
They have a Visual Studio Add-In for submitting work items directly from the IDE, but that's about it I remember correctly.