I like Team Edition for Database Professionals... if you do ANY management of Sql Server databases then you should take a look and ask yourself if your life wouldn't be easier to use it.
I then thought "Wouldn't it be cool to build these database projects on TFS?"
Yeah.. it would, but it isn't as simple as it should be.
First problem: You need to install 'Team Edition for Database Professionals' on your Build machine.. messy, but not a show stopper.
Second Problem: Permissions.
If you have a good TFS Build Server, then your user should be a Windows Standard User.. and not a super God like user that you need to run anything without pain on a Windows machine.
1) First, identify your build user, for example: Hal-Domain\Dave
2) In the Sql Server 2005 management tool, assign Hal-Domain\Dave as dbcreator and securityadmin
3) Run the following sql as DBO:
USE MASTER
GO
GRANT EXECUTE ON sp_detach_db TO public
GO
GRANT VIEW SERVER STATE TO "Hal-Domain\Dave"
GO
A full overview of permissions can be found here
For search engines, the error was:
Microsoft.VisualStudio.TeamSystem.Data.Common.Exceptions.DesignDatabaseFailedException: You have insufficient permissions to create the database project.