Set the Output Folder to the destination UNC for the Debug and Release build types.
Set any other WDP properties appropriate to your environment, such as Web.config file section replacement.
Make sure your build server has VisualStudio and VS SP1 installed. If the server does not have the C:\Program Files\MSBuild\Microsoft\WebDeployment\ folder, you may need to install Web Deployment Projects as well.
Create fixup.TeamWebDeployment.targets (see below) in C:\Program Files\MSBuild\. Normally, the Team Build drop location overrides the Output Folder, so this file adds a second compile task to put the web app where you wanted it to go in the first place.
Add an import directive for $(MSBuildExtensionsPath)\fixup.TeamWebDeployment.targets.
Create the team build, choosing your solution and build type, but you MUST choose Mixed Platforms as the Platform, or things will go very badly for you.
Also, I have to ask any MS folks out there: Why C:\Program Files\MSBuild\ ? Why not C:\Program Files\Common Files\MSBuild\ or C:\Documents and Settings\<current/all user(s)>\Application Settings\Microsoft\MSBuild\ ? This adds yet another customizable location that needs to be backed up.