Is it recomended to run the CS-Converter client on the TFS server computer?
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Running the CS-Converter client on the TFS server computer (or VM) is not recommended because of the following reasons:
·Access to TFS is slower when it's done from the same machine. For details, please read the 3rd section on: http://blogs.msdn.com/buckh/archive/2005/12/12/503015.aspx  
·CS-Converter uses threads to improve performance. For example, it checks in a changeset to TFS and simultaneously retrieves the next changeset from the origin repository. When the CS-Converter client is run on the TFS machine, the usage of threads has no effect, or in some cases has a negative effect.  

If possible, install the CS-Converter client on a stand-alone Windows workstation. (Pentium 4 processor with a least 256MB RAM required. See next faq on how to retain your settings.)

If you don't have an available workstation, install the CS-Converter client on a stand-alone VM.