The answer is: NO YES
You have to remove the user account from all TFS Groups and Projects, otherwise it will show up in the Assigned To field.
The easiest way I know is: in Team Explorer, right click the root of the server -> Team Foundation Server Settings -> Group Membership and search for a group you surely know that the user was part of. Double-click the group, and double-click the person. A window will show up with all the groups the user is member of. Print screen-it to have this info in the clipboard and remove the user from each group.
You must also remove the user manually from the Project Portals. Check again the clipboard to see in which portals might the user be. Open each affected Project Portal, go to Site Actions (on the right), choose Site Settings, People and Groups and delete the guy.
The interesting thing is that from the Reports Sites the user will be removed automatically, no work to do there :-)
UPDATE: Lately I had an email discussion with a developer of the TFS Administration Tool and he revealed me that TFS hourly syncs with the identity stores and if a user GUID cannot be resolved, it will mark it as deleted. That means, it's enough to delete the user from Windows and Sharepoint. From TFS and SQL Reporting the user will be automatically removed. I have not tested this though.