Microsoft Has just released two updates (one a QFE for the TFS object model and the other a new version of the Team System Web Access Power Tool) that should significantly improve the scalability. Most of the issues fixed had to do with memory over allocation or leaking that resulted in memory exhaustion and process recycling.
You can get the updates here:
· KB974402 - QFE for TFS Object Model Assemblies
· TSWA 2008 – Updated TSWA 2008 SP1 Release (full install, you need to uninstall your existing TSWA 2008 instance first)
And you can read a bit more about it on Hakan's blog: