The TED is still traded by pro's in the cash market. Some traders trade the TED exclusively. The TED spread simply measures the risk between US treasuries and US dollar deposits between banks.
I think the TED has some interesting possibilities as a hedge against disaster in the financial markets. at below 20 in the 3 month area, there is not alot of risk in the trade, but plenty of potential for reward if a large bank collapses and creates a chain reaction of failures.
With the demise of the T-Bill contract years ago, I have been looking at the alternatives listed in previous posts. I look forward to hearing from anyone who has actually traded them.
Remember that following the crash in 1929, interest rates on treasuries dropped while rates on non treasuries went up. A repeat of this could make the TED a career trade.