I know this is old news, I found it in my drafts folder in <shameless product plug> Windows Live Writer </shameless product plug> and had never actually published it. Figured maybe it was news to you 🙂 DOH!
Our hard-core and super-cool VSTS Rangers released an updated version of the Project Server/TFS connector for TFS 2008 to Codeplex last week. This version has fixed several bugs related to setup and configuration and a few other bugs, as well as fully supporting the recent release of the Team Foundation Server. See more details in the release notes.
If you are using this connector, please be sure to post your feedback to the Codeplex site to optimize the bug-fixing process and planning of the next release.
Check out Jeff Beehler's blog for more info: http://blogs.msdn.com/jeffbe/archive/2008/03/11/project-server-2007-connector-refreshed.aspx