Visual Studio 2005 SP1 is out the door! Get your bits here.
There are fixes and enhancements across the entire Visual Studio 2005 product line so be sure to download the corresponding SP1 bits for your edition. I'm especially excited for Team Foundation Server SP1. Brian already provided a lot of information about what SP1 means for Team Foundation Server so I'll just link to his posts here, here, and here.
Earlier today I was talking to Ed Psyk who works on servicing for Team Foundation Server and is one of the many people responsible for getting SP1 out the door. He explained that there is no requirement to install SP1 of Team Foundation Server and SP1 of the Visual Studio 2005 "client" at the same time. While we certainly suggest that you install SP1 on all of your machines running Visual Studio 2005 or Team Foundation Server 2005, the team planned for the situation which exists where you may wish to have staged rollouts. The only scenario which won't work if you patch Team Foundation Server without patching Visual Studio 2005 is that any WIT Custom Controls you may have created with the new functionality that exists in TFS SP1 will not render unless you also have SP1 installed on the client. But even if this happens, the operation will fail gracefully and users will see a message to indicate exactly what happened.