I thought I would post the steps required to connect using TFS 2010 RC. This was worked out with the help of Stephanie Herr (Thanks)
Install the Team Systems Explorer for 2008.
Create a new team project collection in the TFS 2010 admin panel on your TFS 2010 server.
Using Visual Studio 2010, create a new Team Project in the Team Project Collection of your choice.
In visual Studio - Select the Team Project and link it to a local path. This will enable the creation of an empty folder which is required at this time.
Create an empty folder in the Team Project. This si the folder you will choose when linking inside of SQL Server Management Console.
Open SSMC, select the database and click on the Create New Link to Source Control in the SQL Source Control Tab.
For the server URL you should specify it like this.
/tfs/Team Project Collection Name
Then you can click on browse and select the empty folder you created in Visual Studio. DO NOT select the Team Project root name, it has to be the empty directory your created.
This is what worked for me, your results may vary. now that I can use it I can start requesting all the cool features I desire....