According to this article on CRN, Beta 2 of Team System will be released at the end of March or first week of April. This beta will come with two predefined process methodologies: MSF Agile and CMMI.

MSF for Agile Software Development (or MSF Agile for short) is a “scenario-driven, context-based, agile software development process”. It is, basically, the extreme programming (XP) model for software development, adapted to fit the Microsoft Solutions Framework. It is sometimes called a lightweight model, in that it is both flexible and adaptable. These types of programming models are great for small projects, or projects that have to be completed quickly.

MSF for CMMI Process Improvement (or MSF CMMI for short) is aimed at “mature application development“. It is a more formal model for development, requiring a more rigid processes be put into place. There are many CMMI models to choose from, and so a development team (typically a large project, with a longer development timeframe) can choose what is best for them.

Of course, you can still choose to implement NO software development model, or customize your own model. VSTS gives you many options in this regard.