Well, it was the big announcement at TechEd. It's essentially a full set of tools to help you with all stages of the software development lifecycle. You can find out more about it at http://msdn.microsoft.com/vstudio/teamsystem/.
I for one am pretty excited about it. Having worked at more than one ISV in the past, I have pretty clear memories of the effort involved to successfully take a project, even a small one, from design to deployment. Work item tracking seems like it shouldn't be such an issue, but it has always been so in my experience, even though we used sophisticated tools to manage it, like "email". And anything that can improve the QA process is a good thing in my book.