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I’m trying to configure Visual Studio 2010 with team foundation server.
I’m getting following screen 
I can add only windows users into user groups
Now, I need to create windows user for every remote user or is there any way get it work?
How can I give access permissions to remote users?
This set of users is specifically meant to have root control access to your TFS configuration. Only provide the names of people that need to be admin for your TFS farm.
Regular remote users are configured in the TFS system itself, not here. When a TFS administrator creates a collection he can delegate the administrative rights to another (group of) person(s). These persons can create TFS projects in that collection and assign roles for administrator, contributor or reader at project level.
See How to add new users to TFS 2010 for more details.