I noticed that the problem occurred mostly after i installed a nuget package. After adding a nuget package i found that I could not check out. Restarting Visual Studio helped.
Based on this discussion:
http://nuget.codeplex.com/discussions/254328
i used this solution which appears to be working:
(I have copied the solution here if ever the webpage disappears)
Control Panel / Internet Options / Security Tab
Select "Local Intranet"
Click Sites button
Click Advanced Button
Add your TFS server http address to the list. e.g. http://tfs
Restart Visual Studio
Source: http://blog.rthand.com/post/2011/08/26/Fixing-combination-of-NuGet-and-Team-Foundation-in-workgroup-configuration-401-Unauthorized.aspx (Go straight down to The Solution half way down).
Don’t let the Internet Options part fool you. I do not use Internet Explorer and this solved my issue.