One problem I've had in Team Foundation Server since Visual Studio 2005 and still in VS 2008 is when items are deleted by someone else, they still show up in Source Control Explorer, with a gray folder with a red X icon, even with "Show deleted items in the Source Control Explorer" unchecked in VS's Options dialog. Sometimes getting latest of the parent clears things up, but other times it doesn't, even with Get Specific Version with both Overwrite boxes checked to force a get. In this case, the only option I've found is to delete my workspace and recreate it, which means checking in everything beforehand, and getting latest of my working branches afterwards. It's a pain, but as specified here and approved by a Microsoft employee, that may be your only option until it's fixed--fingers crossed for VS 2010. (We won't get into the other things for which my fingers have been crossed since I first used TFS in 2005, things that VSS did just fine, such as rollback, check in changes and keep checked out, and search.)
Anyone have any better solutions? Deleting and recreating your workspace seems a bit drastic.