The assembly cannot be replaced by TFS because it is used by another a process. You can start diagnosing the problem by finding out which process has the assembly locked. This can be done by using a tool like Process Explorer (http://technet.microsoft.com/en-us/sysinternals/bb896653.aspx). In my opinion the file is locked by the Visual Studio Designer or Visual Studio itself. You can try deleting the file with Visual Studio turned off to see if it is locking the assembly. Another possibility is the software you are developing.
Please let me know how that went.
the Telerik team