Team Build requires Team System installed on the server
Team Build is a seperate installation on the Team Foundation Server CD that offers automatic, integrated build functionality. With this service installed, you can use your server (or another server) as a dedicated build machine which automatically runs your MSBuild project script, logs everything, and dumps the binaries wherever you want.
It's primarily for on-demand building. It doesn't do scheduling, unfortunately, but there is a relatively easy way to set up automatic builds through the Task Scheduler. There's also a new continuous integration add-in from a Microsoft PM on Team System.
The Team Build install worked fine for me on the server, and it integrates nicely into the IDE:

Team Build is highly integrated with the rest of Team System: you can even select the various build numbers you generated as targets in your work items. And work items for bugfixes are updated with resolved build numbers automatically! Very nice.
However, I was surprised to find that I couldn't perform automatic code analysis as a part of my build because I hadn't installed any of the Visual Studio Team editions on our Team Foundation Server. Installing a client app on a server isn't exactly intuitive, but it's what you have to do.
So, for the record, to get full Team Build functionality, you must install a Visual Studio Team edition (probably Test or Developer) on your build server. The benefits of doing so are outlined in this blog post:
- Team System Tests integration. Tests included in TeamBuild scripts will run.
- Complete support of C++ projects. TeamBuild compiles only ‘ISO C++ applications’ and ‘Managed C++ apps (safe and pure mode). Installing VSTS or VSTT will bring the complete support for C++ compilation.
- Compiling VS setup projects. MSBuild does not have native support for building VS setup projects. Users will need to choose ‘devenv’ command line to compile these projects.
- Code Analysis Integration. Code Analysis (a.k.a FXCop) rules included in TeamBuild scripts will run.
In general, anything you can dream up in a MSBuild script should run, assuming the proper dependencies are in place on the server.