VS 2008 works fine with TFS 2005. There are a couple of exceptions in the Team Build area (which changed massively between 2005 and 2008) but otherwise you will be able to do everything you need to do from the Visual Studio 2008 client.
You need to ensure that you have the 2008 version of the Team Explorer installed to add TFS functionality into Visual Studio. The 2005 version only installs into Visual Studio 2005. To download the 2008 version see the following link
http://www.microsoft.com/downloads/details.aspx?familyid=0ed12659-3d41-4420-bbb0-a46e51bfca86
Note that if you have previously applied SP1 of Visual Studio 2008, then you will need to run it again once installing Team Explorer.
For what it is worth, I would encourage you to upgrade to TFS 2008 on the server side as soon as you can. TFS 2008 works fine with client connecting from Visual Studio 2005 machine but it has some significant performance improvements and the Team Build functionality is much improved.
Good luck,
Martin.