I\'ve upgraded from ASP.NET MVC Beta to 1.0 and did the following changes to the MVC project (as descibed in the RC release notes):
...
I assume you meant you changed the following setting in the .csproj file:
true
The setting you posted in your question shouldn't be touched. If it works on your local machine, then obviously you can pre-build an ASP.NET MVC application.
I think you need to track down what's different between your TFS build environment and your local VS machines. Maybe it's using a different version of MsBuild or something.
Try performing both builds with verbose output and compare the two to see what's different.