We currently use Scrum for Team System on TFS 2008. As I'm about to start upgrading our TFS server to 2010 I'd like to also remove the need for any of the Conchango templates in favour of native agile support.
Is there any way of doing this while preserving current data or is it safest to just start again using the new templates?
You can attempt a migration of the Scrum for Team System 2008 workitems to the MSF Agile 2010 by using the TFS Integration Tools and creating mappings from the old templates to the new ones.
I had exactly the same challenge more than a year ago and made an attempt to do the mapping. This is a massive job, because for each attribute of each type of workitem you need to find a proper mapping, often also converting data types. After having achieved this partially for the user story workitem, we decided to just start over all new with the MSF template.
Some people have attempted migration with Excel in between, which might be working for some simple items.
So IMHO, if you have a lot of items that must be migrated from 2008 to 2010 between different templates, you might try to get the most essential attributes (title/description/etc) over by migration either using the TFS Integration tools or Excel. In case the bold sections do not apply, do not bother the effort and start over new.