TFS – Explanation on Area & Iteration
Area
An area represents a category used to group work. Many times this is referred to as a module or feature set. For example, a project may break down work by defining a user account profile module, an order entry module, an order history module, or an inventory module. These modules or areas are used to group tasks and other work items in the system. This capability is useful for reporting and tracking. Areas can also be defined in a hierarchical structure. This allows for the definition of subareas and the like.
Iterations
An iteration represents a time period on the project in which you will execute some portion of the work. The intent of an iteration is to time-box some set of work items that will be delivered in a specific window of time. You may define 30-day sprints, for example. In addition, iterations may overlap one another for various reasons. Typically, this is the result of a hand-off between team members or groups on the project.
For example, suppose you define four iterations for your project. Each iteration may be defined as a 30-day time-box. You would go through the full life cycle of development for a subset of functionality during each of these iterations. You might define two to four areas or modules to be developed during each iteration.