I have created a team underneath the Team Members section (in Team Explorer), but I cannot select this team from the drop down in my Bug. This drop down (highlighted text in image below) has no teams listed in it.
What am I doing wrong?
We are using the http://www.scrumforteamsystem.co.uk/ template for TFS 2008.
Go to TFS explorer, go to your project and right click on the project title and Select "Show Project Portal"
Once its loaded up in your browser, click on "Team Project Administration" Tab.
The team option is the second box on this page. Add your teams to there, and they will then appear in the dropdown within TFS Solution Explorer.
You will need to save any bugs first before you can assign it to a team though.