TFS Beta 3 Installed, with minor caveats...
I downloaded and did a native-machine install on TFS yesterday. Following Rob's instructions, I made it thought a physical machine installation (i.e., not a VPC as usual) on my home Windows Server. It, of course, warned that my 1.5GB RAM and Athlon 2200+ might not be fast enough, but I think it will handle one person well enough. I using a single-server configuration in workgroup mode (i.e., not AD) and followed up by installing Team Explorer.
Everything went well except for a file-not-found exception in CoverAn.exe during the foundation server install... I ignored the error and later discovered that Rob has an answer for that too (i.e., ignore the error).
Since then I've installed Team Explorer onto a notebook and connected to the TFS as a workgroup user. Everything seems to work fine! I probably won't have time to play with build or proxy for awhile; but in the mean time I have a great playground for Team System!