In the caveats section of the XML Web Services section of the documentation it reads:

"The wsdl.exe tool, which is used by vs.net, generates proxy classes to work with a webservice. If this service returns or uses entity or entity collection classes, the wsdl.exe tool will think they're DataSets and will generate code which use the DataSet instead of the typed entity classes, which don't derive from the DataSet also. This will give non-compilable code on the client.

This is fixed in .NET 2.0, but till then"

I am using RC1 of VS.NET 2005 Team Studio. When the proxy is generated, it puts System.Data.DataSet objects into the generated proxy, and NOT LLBLGen objects.

Is this due to something that I am doing wrong or was an expected feature removed from VS.NET 2005?

I am not decorating my web service classes with the XMLIncludeType attribute, could this be the issue?

Please check this thread: http://www.llblgen.com/tinyforum/Messages.aspx?ThreadID=4429

I have read that thread and I am not sure what to make of it.

Here is what I am assuming about the thread: 1. The functionality isnt in LLBLGen yet 2. If I want it to use webservices without having to muck with the proxy that I need to ..... run the 2 TDL templates in the thread using template studio?

Is this correct?

Correct.

It's a work in progress at teh moment. Because RTM is out just a few days, not all the info required is consumed and utilized. Once it's clear what to do, I'll update the bits.