It's a little bit simpler than the way you first described in the sense that it's independent of your 'source control system' i.e. TFS.
All the obfuscation happens on the build server- so someone has to manually configure- this gives more details:
http://www.red-gate.com/supportcenter/C ... ithMSBuild
Then, very simply, each developer can access error reports when they have a copy of the smartassembly project. Obviously this is most sensibly managed with the same source control system you use - but it doesn't have to be.
I have purposefully spoken in very basic terms here- there is more to be said but I just wanted to get the basics across. I hope it has helped.