How To Create A Branch In Team System 2008
Before I start with the how to create a branch step by step guide, I like to remind that creating a branch should be done by a SCM (Software Configuration Management) plan and not when ever you “feel” like creating a branch. It is very important to manage your branches or else you will have a big pile of branches that no one knows there purpose.
After saying that here is the step by step guide:
The demonstration will be for a demo project called "Web Sites".
Step 1: Right click the source folder that is candidate for Branch.
Step 2: Choose the Branch option

Step 3: Change the "Target" field to contain the Source Control path for the new branch.
By the SCM (Software Configuration Management) plan of this demo the path should contain the version number of the branch and it should be located in the "Test" folder.
Step 4: Make sure that the "Branch from version" field shows "Latest Version" in order to "branch" from the latest available version of code.
Step 5: Click the "OK" button.

Note: The “Create local working copies for the new branch” checkbox is optional, if checked it will automatically creates a new folder for the branch locally.
Step 6: Now you have the branch ready in the "Test" folder with the name "3.0 Web Sites" but it is a local copy and will not be shown by other users until you will check in the changes. Right Click the new Branch and choose the "Check In Pending Changes…" option.

Step 7: Add your comment and click the "Check-In" button
That is all, you have a new branch.
Have Fun!!!
This post was also published in my personal blog here.