If you are experiencing an error when connecting to TFS 2010 using Microsoft Visual Studio Business Intelligence Development Studio (BIDS) while you don't have this problem connecting using VS 2010 so follow below steps to fix it.
1) Close your VS 2008 instance if you have it open.
2) Install VS 2008 SP1 if you don't have it already.
3) Install Team Explorer Forward Compatability Update:
4) From the start menu, Open Run window and type: regedit
we need to update the default entry of your Team Explorer for TFS server url.
HKEY_CURRENT_USER -->Software -->Microsoft-->VisualStudio-->9.0 -->TeamFoundation -->Servers
Right click on Server and click on add string:
set the name to: tfsservername
set the value to: your tfs server url, for example:
Collection Name: is the project collection you want to connect to in TFS.
5) Close registry editor window and open VS 2008 BIDS.
6) You will automatically be connected to the project collection you previously specified and be able to bind your projects to the TFS 2010.
Hope this helps.