I have been developing with the LINQ and the ADO.NET Entity Framework for quite some time now, and whilst it "works" in the simple sample applications, most developers will quickly come against odd behaviours or errors. I have submitted the following issues to Microsoft which explain all the bugs or usability issues, hopefully they will make it into the Visual Studio 2008 Serivice Pack 1 (currently Beta 1).
Click the links below to get answers to all the EF issues I have found. Please also click the "Rating" (e.g. Very Important/5 stars) and "Validate" the issue to help increase the rank of the issues and the likelyhood that MS will work on it before the Service Pack 1 is released, otherwise it will be a long time before they are dealt with (i.e. Service Pack 2 or worse; the next version of Visual Studio!).
Entity Framework custom tool does not correctly embed or load the model as resource files
Entity Framework uses incompatible types (e.g. datetime2) when deployed to systems with older SQL Server versions, even when source database had compatibility level set correctly
Entity Framework .csdl .msl and .ssdl files are first class source objects, but not treated as such
Entity Framework connection strings duplicate information and have complicated constructors
Click the "Workaround" link to see how to address each issue.