If you are trying to install TFS Beta3, make sure that you configured WSS in server farm mode (during GUI setup). If you don't do that, because you don't RTFM (as I often do), you might get the error message:

"Windows SharePoint Services is not configured as recommended by Team Foundation Server

Windows SharePoint Services configuration does not meet Team Foundation Setup recommendation."

Alternatively, WSS installation can be started silently with:
C:\>DownloadDirectory\STSV2.EXE /C:"setupsts.exe /remoteSql=yes /provision=no /q"
where DownloadDirectory is the path to the location on your hard drive where you saved the downloaded file.