We’ve struck this error trying to check-in a file in Visual Studio Team System. You get a very helpful dialog that says “The handle is invalid”.
Turns out this is a bug that has been fixed post-Beta3, and bites you when two people have checked out an item. The workaround is to use the Get Latest Version menu-item, merge changes then you should be ok.
See this post (Broken link, was originally forums.microsoft.com/MSDN/ShowPost.aspx?PostID=124876&SiteID=1) in the MSDN Forums for more details.