We had just finished migrating one of our Team System projects from TFS 2005 to a new TFS 2008 machine, when we suddenly noticed that all Team Foundation Server group permissions that had been set on certain project folders via Properties / Security would not show up in the Security tab the next time the Property dialog was opened. The funny thing is - the permissions themselves seemed to work! There was just no way to view, edit or remove them. Same was true for the tf.exe commandline tool ("tf permission ...") - it did not list any existing permissions.
After hours of internet research I finally found this posting. And sure enough, after checking which .NET 3.5 Framework servicepack level was installed on the server (SP1 in our case), and identifying the Team Foundation Server 2008 servicepack level (TFS 2008 RTM, which is not so easy to find out and includes checking the assembly version number of Microsoft.TeamFoundation.Server.dll located in %PROGRAMFILES%\Microsoft Visual Studio 2008 Team Foundation Server\Web Services\Services\Bin (simply google the version number to obtain the release definition)), we had confirmation that it was really that combination of product releaes which caused the group permissions to not show up.
It's highly recommended to have matching .NET Framework and Team System releases installed side-by-side (.NET 3.5 SP1 and TS 2008 SP1 in this example).
