Jim was good enough to respond to me directly when I submitted through his ThinqLinq web site - much of which has already been added to this post by now.
I actually ended up going out and buying the book he co-authored ("LINQ in Action") and spent a good chunk of the weekend reading through it.
My original questions and perspective were quite naieve. LINQ is used for a WHOLE lot more than just database access. LINQ is a very easy to use, powerful tool - without changing a thing about the data access on your site, you can start using it today for accessing in memory objects.
If I had to answer my own question, using LINQ rather than custom objects and a DAL is probably going to be a no-brainer. Through the use of a DBML file (which is basically drag and drop), LINQ replaces your DAL and objects in one fell swoop. I was absolutely mistaken in thinking it was a move away from object oriented programming and back to inline SQL - instead, I'm learning that it is a far more effecient means of accessing data.
For anyone looking to learn more, "LINQ in Action" is fantastic. It is the first Manning publication I've purchased but it will certainly not by my last now.