Just to make sure I understand what you saying, you are deleting a folder from you Visual Studio project that is under source control. Are you getting an error when you try to check in pending changes? If so, I've seen this before and the person needed to push the refresh button at the top of the Check-In window.
If this is not your problem, how are you doing the delete? Are you deleting within Visual Studio 2005? Source Control Explorer? The File System?
Doug R
Have you tried just deleting the folder from Source Control Explorer? I remember getting some strange behavior in the past when trying to just delete files from the file system. It was a while ago, but I think I ended up checking out the folder and deleting from within Source Control explorer and the check in the delete.
When you Get files into your local cache (local PC), the TFVC server keeps track of the files and versions that you have retrieved. If you physically remove the files from the local drive, TFVC doesn't know that they are gone. If you delete the files from Source Control Explorer and then do a check-in to commit the delete, the files are removed from TFVC and from your local drive.
The important thing to remember about TFVC is that it wants to control the files in your local cache and doesn't know what you do outside of Source Control Explorer. When you "Get Latest" or "Get Specific Version", TFVC will sync your local cache with the files on the server. This extends to adding new files that you don't have, updating files that are out of date and deleting files that have been removed from version control. It is also why you cando a "Get Latest" but TFVC tells you that all files are up to date, even after you deleted your entire source code folder. TFVC knows that you sync'd up with the latest files the last time and has no idea that the files have been deleted from the drive.
- Steve