In the previous post, I discussed how bad was to expose EF entities directly as data contracts from a perspective of “interoperability”. This also revealed a lot of internal implementation details about EF that the client applications should not worry about.
As Daniel Simmons pointed out, the next version of Entity Framework (4.0) will ship with a new and very useful feature to represent the data entities using POCOs (Self-tracking entities). This new support for POCOs will make possible to simplify a lot the final representation of entities on the wire, hiding all those annoying details about EF. You will also able to decorate the entities with DataContract/DataMember attributes if you do not want to expose the whole entity in the service.
However, I still do not buy the idea of using the EF entities as data contracts. By doing that, you are coupling your service interface to the final data model, which is not a good idea since both layers usually evolve at different rates. What is worse, any change in the database model might affect your service interface as well, breaking the contract that any potential consumer have with the service.
This last aspect is related to versioning. The versioning between the two layers is completely different, you might have for instance an User entity in the data model, and different versions of the same entity in the service interface, UserV1, UserV2, etc (Any of these corresponding to a different version of the service). The service is the responsible of making the transition between the different data contracts to the final data model entities.
I think this might be only useful for RIA applications where you use the services as a mechanism to interchange data between your backend layer and the UI, for instance web applications that use Ajax Callbacks or Silverlight applications. So, the number of potential consumers of the services is really low.