Error:
TFS Error 2900: Execution of a full-text operation failed. 'Access is denied.' Creating full text index on Workitem
This error (actually the generic error 29000) came when installing TFS2008 on a dual-server configuration, where the data-tier was clustered. It turned out that the SQLFullTextService was running under the TFSService account and it didn't have sufficient rights to the databases.
Resolution:
After the TFSSerice was made sysadmin on the database and the full-text service was restarted (from within SQLServer Mangement Studio or Cluster Admin - not the Service MMC as that would have made the fulltext service to fall to the secondary node) it worked.