The underlying project files are the same with VS as with K2 Studio so that shouldn't be the issue.  A lot of our customers use TFS as well and offhand I'm not aware of any other extra steps when VS is integrated with TFS.

So I would concentrate on narrowing down the problem and looking for any error messages that might be raised:

• 
  
• does the K2 process actually get deployed to the k2 workflow server successfully?  Check the K2 Workspace to make sure.
  
• does the user have permissions to start the process?
  
• is the SharePoint event firing and even trying to contact K2?  Look at the SharePoint and the K2 events in the application event logs.
  
• Maybe try deploying another test process that's not started automatically but requires you to manually initiate the workflow.  See if that provides any clues.
  

Hope this helps.   Tim

The error I get in workspace with the default activity and the email send is:

Could not load file or assembly 'CSWinWF-a8f7774879e940c98f0d6db5c9b018e2, Version=0.0.0.0, Culture=neutral, PublicKeyToken=null' or one of its dependencies. This assembly is built by a runtime newer than the currently loaded runtime and cannot be loaded.

Okay I think I know what the issue is.  Your VS is probably set to target the .Net 4 framework while K2 is running under 3.5 probably.

Take a look at the following kb article.  There is also a topic in the help.

http://help.k2.com/en/kb000686.aspx