The latest Project Server to TFS Connector was just released on CodePlex.
This release of the PS2007 VSTS Connector is targeted to work with Team Foundation Server 2008 and resolves several bugs that were reported in the first two releases.
They've done thier best to ensure that this Connector is easy to install and well documented.Future versions of Team System will have native integration with Project Server, in the meantime this Connector solution is the best way to integrate the two Microsoft products. This solution builds on the previous PS2003 VSTS Connector, published on GotDotNet. This solution is intended to provide guidance, provided as source code that can be used "as is," extended, or modified by developers to use on enterprise development projects.