I've just joined my friend's Team Services account (free for the first 5 users account). If I visit the home page (https://XXXXXXX.visualstudio.com/Development/Development%20Team), I can see us both listed as Team Members. I can create backlog items/tasks and assign them to myself. My friend can create backlog items/tasks and assign them to himself. However, we can't assign each other.
Why could this be and any suggestions on how to resolve this?
In the Assign To dropdown list of a work item, it shows a list of most recently used users.
Because you have just joined VSTS and never assigned work items to others, you could only see yourself in the dropdown list. To assign your work item to your friends, you could search his username at Assign To textbox.