I've been trying to find an answer to this question for days now. Here's what I found so far.
Microsoft wants us to use the Entity Framework vs L2S. But it's also been written that L2S is easier/faster to use and implement. Then on the other side of the coin it's been written, by the same folks incidentally, that the L2S days are numbered and all the L2S functions will be part of the new Entity Framework release.
Long and short of it are the Entity Framework is more robust and is the way Microsoft is going. Microsoft will continue to support L2S but will put more effort into the EF and the Linq to Sql will be retired. The new term, I think, is LINQ to Entities (L2E).
Additionaly I found that the new .NET 4.0 will have lots of new Entity Framework features and functions.
I'm still evaluating these and I haven't come to a clear conclusion on which is better. I have new applications that i'm working on and I'd really like to settle on the 'right' one. I can't find much in the way that Microsoft plans for it's migration strategy or what they suggest we should do in the short term.
I think L2S is still okay but L2E is the way to go mid to long term. I think...
If anyone else knows more about this please chime in. This seems to be a real popular question these days.