The good news is that VSTS2010 has the capability to script team project creation out of the box. Grant Holliday wrote a post on Scripting Team Project Creation in TFS2010. As Grant states, this is a step in the right direction, earlier we had to relay on the power tool command line utility for creating team projects.
The bad news is that the 2010 version for scripting team project creation requires some GUI interaction and the VSTS beta requires the team explorer tab to be selected the last time Visual Studio was closed. I also look like VSTS2010 can’t create team project for TFS2008 through scripting.
Hopefully this can be fixed before the RTM version.