If you are upgrading or installing TFS 2012 Update 4, you must use SQL Server 2008 R2 SP1 or newer.
If you try to use SQL 2008 R2 RTM you will hit this error:
[Error] TF400744: An error occurred while executing the following script: WorkItemTrackingToDev11M55.sql. Failed batch starts on the line 9. Statement line: 42. Script line: 50. Error: 102 Incorrect syntax near ‘(‘.
After upgrading your SQL Server to 2008 R2 SP1 or newer, you can restart your TFS upgrade by opening the TFS Administration Console. Navigate to the Team Project Collections node. Select each collection, go to the Status tab at the bottom of the page, and select the failed job. A Retry Job link will appear on the right. Click that to restart the job. Repeat for all failed collections.
You can download SQL 2008 R2 SP1 here: http://www.microsoft.com/en-us/download/details.aspx?id=26727