Setting-up Visual Studio Team System in your team's Software Project Environment is simply a matter of:
Start by downloading download the latest version of the TFS Installation Guide and then follow its instructions to install the data and application and tiers of VSTS on a PC running Windows Server 2003 (SP2). In summary, this requires you to install:
Consult the TFS Installation Guide for instructions about installing Visual Studio Team Suite (the client tier) on your team member's PCs