Agile development with TFS – Process Templates

Team Foundation Server (TFS) supports several process templates for managing work on your project including a few built in the box and 3rd party templates. The question is which one do you select for your project? MSDN states the following:

Choose Visual Studio Scrum if your team manages bugs along with product backlog items during sprint planning

The SCRUM process template tracks Bugs at the same level as Product Backlog items and tracks estimates using an Effort field. Tasks contain fields to track Remaining work only which is automatically zeroed out when the task is set to Done.

Microsoft Solutions Framework (MSF) for Agile
Choose Agile if you want to triage bugs separately from the product backlog and resolves work items before closing them. Also, choose Agile if your team allocates time for bugs with each sprint.

The Agile template is designed to support Agile development for teams that don’t want to be restricted by Scrum. It supports estimating User Stories using Story Points. Tasks contain fields to track Original Estimate, Remaining, and Completed work fields. Bugs aren’t tracked on any backlog page.

I hope this helps as it took me some time to find an authoritative answer.