If you have tried to create a new Team Project from Visual Studio 2010 against a TFS 2012 server, you have undoubtedly encountered this error message.
After doing some research, it’s quite apparent that some changes were made to Team Foundation Server that make project creation incompatible with older TFS Clients. The error message actually doesn’t have anything to do with permissions, and during the beta for TFS 11.0 the error message was inaccurate and vague. I came across a statement by Buck Hodges, the current Director of Development for Team Foundation Server:
You must use the Visual Studio Team Explorer 2012 (included in all Visual Studio editions or may be separately downloaded) to create a team project on a TFS 2012 server. If you use VS 2010, you will get an error about not having permission. The error message is very misleading, because itâ€™s not a problem with your permissions.
A bug was even reported, but closed by Microsoft, so it appears there are no plans to resolve this. Unfortunately sometimes this is the cost of adding features and releasing new versions, and you can still use Visual Studio 2010 SP1 against TFS 2012, just don’t expect to be able to create projects. Something to consider when thinking about migrating to TFS 2012.