Chris Menegay's article on MSDN, Using Source Code Control in Team Foundation, provides a good overview of some of the major features.
As a part of Visual Studio 2005 Team System and the new Team Foundation Server, Microsoft is providing a true enterprise-class source code control system. Team Foundation Version Control (TFVC) is provided as part of Team Foundation Server and offers integrated source control for Visual Studio 2005. Make no mistake about it: TFVC does not share any heritage with Visual SourceSafe. TFVC was written from the ground up to solve limitations of using VSS on large development projects. Instead of relying on a file system as the repository, TFVC leverages Microsoft SQL Server 2005 as a robust, scalable, high-performance storage mechanism.
Team Foundation Version Control provides all of the basic functionality of other source control mechanisms and most of the enhancements listed for Visual SourceSafe 2005. In addition, TFVC provides new advanced feature, including Shelving, checkin policies, and integration with the new work item tracking system. These features are described later in this article.