Does anyone know of any bug tracking software the Microsoft produces?
It seems that TFS isn't very conducive for this type of function.
If not, then what bug tracking applications can you recommends which may be open source or licensed?
For instance I was looking at DevTrack from TechExcel and it seems very useful for this function.
I recommend JIRA. I've used it for many years on numerous high-end (multi-million dollar) software development projects and currently using it for database development. It's insanely cheap, hosted for you or you can install a standalone.
JIRA is also very customizable on all ends. It has numerous components that go beyond bug tracking like AGILE components for project management (which is rather nice IMHO), wiki/portal components, FAQ components and various other components for whatever your heart desires.
JIRA operates on a per user per component per month fee. It's really good for small teams and fair for larger teams. The only downside that I've seen over the years is that JIRA does not handle large teams and large database of issues across multiple projects well. It did perform bad during times when you have 3 different offices thriving on the tool for development and testing, but that was almost 2 years ago. JIRA has certainly improved since then, but test the waters if you expect a rather large database of issues with 200+ employees using the software for both bug tracking and project management.
I use JIRA, Confluence (Wiki component) and AGILE (Scrum component) for our small team. Everyone using it, loves it.