TFS 2010 error when creating team project

This error raised, when the TFS versions are mismatch. That is TFS server version & the TFS Client (Team Explorer).

We had to uninstall previous version of "Team Explorer" & install new version.
(In my case had to uninstall TFS 2010 beta & install TFS 2010 RC)
Then it starts work fine.
Cheers...