In a recent discussion around replacing source control systems at work, the subject of Team Foundation Server "Workgroup Edition" was raised. At the time, the team could easily handle the 5 user limitation, so it seemed like it could be a good way to get TFS up and running without incurring the full costs of the product.
However in the back of my mind alarm bells were ringing. Memories of the "procedure" to upgrade from the 2005 beta to the final product were lingering - luckily I wasn't the one who had to do it in that case, but from an observer's point of view it seemed a lot more painful than it should have been. Anyhow, it seems those reservations were indeed correct. That link contains information well worth knowing if you're considering purchasing the Workgroup edition with any possibility of outgrowing it.
As much as I like using TFS, it's my personal opinion that if you're finding it hard to justify the cost (due to whatever reason - small team size, not intending on using all it's features, etc) then you probably just need to spend a little bit of time evaluating the alternatives. Visual SourceSafe is not an alternative. I've recently spent a bit of time setting up SubVersion as well as TRAC. First individually, and then integrated. They're both excellent, and they're both free.
The simplicity and speed of TRAC makes it a joy to use, it's configurable, and it's free. The downside is that TRAC's Windows install can be a bit of a pain - there are a lot of individual things you need to install and configure, and you'll need to track some of them down yourself. However if you spend a bit of time documenting the process (or luckily getting to build on top of someone else's document) then it's well worth it.
SubVersion is much talked about and well known by most developers. There are plenty of Windows setup guides out there, but you can easily ignore them all and go download the VisualSVN server installer. Download, run, done. I bought their VisualSVN client as well, because it simply integrates so nicely into Visual Studio. If you didn't want to spend any money at all then you can simply use TortoiseSVN or try AnkhSVN (the latter is also free, but apparently has a few issues with VS2008. I didn't spend a lot of time trying to make it work, I simply read a few posts talking about issues with it and decided VisualSVN was a better use of my time - your mileage may vary!).
With those 2 in place (and maybe a little bit of use of WinMerge when needed), I'm finding I've got everything which is important to me in my day to day developer life. Sure, I haven't spent time yet trying to throw any CI elements into that mix yet, but I'm sure it won't be too hard when I find the time.
The fact that SubVersion and TRAC are good products is probably old news to a lot of people - I have to admit that when I started testing them out I was somewhat skeptical and expected to disagree with the majority opinion (that's pretty much my style). However, I was pleasantly surprised. Free stuff can be good.