Visual Studio Team System

Is it just me or is this Visual Studio Team System trying to sell Waterfall as Agile?

So now they're selling methodologies? Next thing you know someone's going to try to sell water in a bottle. As if!

What do you guys mean? I don't see where the Team System is promoting Waterfall over any other, or worst trying to make Waterfall pass for Agile.

The Team System allows users to define their own process templates. (Software-Development Methodologies and Visual Studio Team System)

And the MSF in no way that I can perceive forces anyone to use Waterfall or confuses it with Agile. There's specific Process Guidance and Templates for Agile, known as MSF4ASD. I haven't tried it, but according to this, this and this, or this, it it seems to follow the Agile Manifest pretty closely.

if Chapter 14 – MSF for Agile Software Development Projects doesn't sound like waterfall to you, perhaps you should read this

Well, it doesn't. Not really. But I can see your point.
However this looks to me as an Agile implementation meant to solve one of the few drawbacks of implementing Agile straight of the Manifesto; doesn't consider tight development schedules or allows for accurate delivery prediction.

Chapter 14 looks very much like DSDM to me. It's got Iterative and Incremental Development all over it.