Team Foundation Server 2008 provides the ability to specify a “remote” Sql Server Analysis server as well as a remote Sql Server Reporting server.  Normally, your Analysis Server is located with the data tier, and the Reporting Server is located on the application tier.  (Of course, everything can be collapsed on a single physical tier as well.)

However, by editing the “msiproperty.ini” file within the “AT” directory of your installation media, you can customize this.  The relevant keys are VSTF_RS_SERVER (reporting) and VSTF_AS_INSTANCE (analysis).  See the Team Foundation 2008 installation guide for details.

What you should know, however, is that apparently Reporting Server instances are not really supported.  If you attempt to specify an instance name in the VSTF_RS_SERVER property, the installation will fail.  This property needs to refer to a server name only.  TFS 2008 apparently expects the instance name to match the data tier instance name (a strange assumption.)  If that doesn’t work, it tries the default instance.  (After that, it will try the first instance it finds…so you might see “WARNING: Selecting the first instance name of…” in the installation log.)

According to this, you won’t see a change in this behavior with TFS 2008 SP1…

I have a few clients that would like to see TFS make use of an enterprise Reporting Services infrastructure (rather than spinning up a new reporting server…)  If you do as well, this is something to keep in mind.