I have tried many ways to add a domain user into Team Foundation Server 2008 without any luck. I keep getting TF53011 error. It seems the security settings on TFS user interface are useless. The Valid User group does not help to make a user "VALID" or say "Licensed".

After Google search for 20 minutes, the command line below eventually did the trick. As I said before Team Foundation Server is garbage. Can you imagine that you have to achieve the most common operation by a command line?

TfsSecurity.exe /server:YourTFSServerName /g+ n:"[Server]\Team Foundation Licensed Users" n:"DomainName\UserName"

Note: You need to keep [Server] as it is without any change.