Hi Cliff,
We've had some minor issues with VSTF because of the way VSTF monitors file and folder structures and BP's unpacking and packing of the extender projects. I'm not sure what the current status is post SP1 but will report if I learn more.
We've used SourceGear's Vault system for some time now and it integrates seamlessly with VS.NET (and using BP Studio Designer). Its like the good old MS SourceSafe but exposes all admin and client functionality over HTTP(s) XML Web Services so have no problem working over the internet.
Strictly speaking you should be able to use any version control system that integrates with VS.NET. It would be great if some other readers could comment on their experiences.
Regards, Gabriel