There are several gotchas when installing Team Foundation Server SP1. I have to admit I was scared which is why it took me until the beginning of March to do it. The big reason I wanted to do it was the improved support for accessing the source control and work items over HTTPS instead of having to give vpn access to my outside developers.
So I backed up all of my databases first, then I started to install SP1. The first issue was that it alerted me that I needed to install KB919156 which is an update that prevents the database from becoming corrupted when upgrading if a web service is invaded to get source from the server while installing the update. That's nice that they remembered to tell me that before hand. So I downloaded that update and when trying to install it, I get this error, "Windows Sharepoint Services is not using the designated Team Foundation Server configuration database (STS_Configure_TFS). To proceed, you must exit setup and uninstall Windows Sharepoint services. Then reinstall Windows Sharepoint Services in accordance with the Team Foundation Installation Guide, and run setup again".
So I started to get a little concerned that if I uninstall Sharepoint, I could cause a lot of problems. So I look up that error and I find out that I need to install the update under the TFSService user. So I do that and get past that error, but then get a weird 28002 Error Unknown message. I searched for that error and found this post: http://blogs.msdn.com/dglover/archive/2006/12/18/upgrading-to-team-foundation-server-sp1-workgroup-version-and-a-gotcha.aspx
Well it turns out that if you are running workgroup edition which has a max of 5 users and you happen to have all five users licenced that you need to remove one before installing and then add that user back after updating.
Thankfully after all that it worked perfect. At least it did not show any errors and now my HTTPS access works great. Getting HTTPS client access to work with Vista and XP is another story. I will save that for another post.
Hopefully this will save people a lot of time and give them the confidence that they can update to SP1 without worrying too much. Make sure you backup first though, you never know what could happen.