If you have installed Team explorer 2005 and afterwards installed Team Explorer 2008, there's a bug when opening Work items in Excel. You got following error
TF80070 Team Foundation encountered an error while performing the operation. It is recommended that you save your work and restart the application.
There's a hotfix available for this : KB946075. Unfortunately you can't download this fix, unless you have Microsoft support calls available in your organization.
But luckily there's a work around for this. You can use Team Explorer 2005 to connect to your TFS 2008 and open from within this tool your excel. I know it's a work around, but till you can get your hands on the hotfix, this should help you.