I just tested this, and it worked:

USE ProofOfConcept;

GO

CREATE FUNCTION dbo.MyFunction (@Input INT)

RETURNS TABLE

AS

RETURN (SELECT @Input AS C1, @Input+1 AS C2);

GO

DECLARE @Var1 INT, @Var2 INT;

SELECT @Var1 = C1, @Var2 = C2

FROM dbo.MyFunction(1);

SELECT @Var1, @Var2;

GO

DROP FUNCTION dbo.MyFunction;

I also tried this:

USE ProofOfConcept;

GO

CREATE FUNCTION dbo.MyFunction (@Input INT)

RETURNS @T TABLE (C1 INT, C2 INT)

AS

BEGIN

INSERT INTO @T (C1, C2)

VALUES (@Input, @Input+1);

RETURN;

END;

GO

DECLARE @Var1 INT, @Var2 INT;

SELECT @Var1 = C1, @Var2 = C2

FROM dbo.MyFunction(1);

SELECT @Var1, @Var2;

GO

DROP FUNCTION dbo.MyFunction;

@@VERSION =

Microsoft SQL Server 2008 R2 (SP1) - 10.50.2550.0 (X64) Jun 11 2012 16:41:53 Copyright (c) Microsoft Corporation Developer Edition (64-bit) on Windows NT 6.1 <X64> (Build 7601: Service Pack 1)

ProofOfConcept database in Compatibility 100.

What precisely are you doing? It should work, if it follows the pattern above.