From the name's similarity with Microsoft's TeamSystem, I thought JetBrains might be trying to compete with Microsoft in the team collaboration arena. They might be still, but TeamCity 1.2 is definitely a continuous integration server.
JetBrains is well-known from their excellent IntelliJ Idea Java IDE as well as their Resharper add-in for Visual Studio 2005. In fact yesterday at the local AgileATX lunch, Scott Bellware and I spoke about how much we actually develop in Resharper more so than in Visual Studio. Resharper replaces the Visual Studio experience with a better developer experience.
JebBrains originally targeted TeamCity to Java developers, but that was because they only had plugins for Java IDEs. With TeamCity 1.2, they have completed an integration plugin for Visual Studio that allows integration with the TeamCity server from the workstation.
For those of you who use Team System (or wish you could afford it), note that TeamCity is a continuous integration server at this point, not a project management server or work item tracking server. TeamCity is competing directly with Thoughtworks open-source project CruiseControl and CruiseControl.Net. You can see a comparison they have done between the three. In the comparison, they appear to have many more features, but none of the "missing" features from my CCNet are compelling enough to make me want to switch at the point. Most of the features are really provided by the NAnt script anyway, not the CI server. You can watch an online demo on their website.
TeamCity is a new product, and I intend on following it as it grows more mature. JetBrains is known for quality software, so there will be some interesting things to come, that's for sure.