I have successfully deployed the custom controls on the TFS server and updated a work item template to include the multi value control.

When I create a work item on a client machine and try to set value in the multivalue control, I cannot see the control. I get the error "Could not find file 'C:\ProgramData\Microsoft\Team Foundation\Work Item Tracking\Custom Controls\10.0\MultiValueControl.wicc'."

Where should the custom control be deployed on the server so that it can be accessed from the client?

You need to install this to all client machines to get the control to work, I created a folder on my team project and uploaded the msi there for all developers to install it. If you want to manually move the .dll and .wicc it would go in the following location on the client machine:

VS2010

C:\ProgramData\Microsoft\Team Foundation\Work Item Tracking\Custom Controls\10.0

VS2012

C:\ProgramData\Microsoft\Team Foundation\Work Item Tracking\Custom Controls\11.0