I am using MS project 2010 for scheduling software development using the agile method. Are you planing to integrate MS Project with Team foundation Server?
My experience with using MS Project 2010 for agile planning is that it generally works well but there are problems with resource allocation / overallocation.
The way I use it is I assign resources with a fixed number of hours over a fixed iteration duration (eg 15 days). The output of this is a resource being assigned a percentage of time over this 15 day period. My goal is that all tasks combined should add up to 100%. Task allocation can then be viewed and balanced in the overallocation view. One of the problems using this method however is that if a task is marked as complete before the 15 day period, it skews the resource allocation percentage and can make it ‘appear’ that the resource is over or underallocated.