Apologies, I'm a bit of a feast-or-famine blogger [:)]
I wanted to post to let you know that workgroup authentication is available in the Team Foundation Server Beta 3 release. I've talked to a lot of customers who were waiting for this, so it is finally here in Beta 3!
One caveat is with Team Foundation Build - in Beta 3, this feature will not work if Team Foundation Server is using workgroup authentication. This is something that has been fixed now - the only caveat is that while in workgroup mode, the build server needs to be installed on the AT (Application Tier) machine.