Here’s a good article that introduces the ADO.NET Data Services features that come with VS 2008 SP1. From what I understand, Data Services is an umbrella for a variety technologies. We’re seeing the first part of this now with SP1. The support includes some server side technologies for making REST based calls for CRUD operations on data. It also includes some client libraries that make the programming experience nicer. The client libraries include APIs for .NET, Silverlight, and AJAX. There is also support for making LINQ queries to an ADO.NET data service.
The data services framework rides on top of multiple data source technologies. It is geared to work well with SQL Server via the Entity Framework. It also supports many other database technologies, or arbitrary data sources.
Data services supports interception so that you can add logic before the CRUD operation makes it to the database. You can intercept a read and restrict the set of values returned to the caller. You can intercept an insert, update or delete and enforce business logic.
Data service also supports security via granular authorization on the entities and operations that the service exposes. For authentication, it takes advantage of ASP.NET and/or WCF’s authentication plumbing.
Data services is kind of a Web 2.0 type product. It works really well with rich web client type apps and/or mashup scenarios. It is positioned to work well inside the enterprise and on the Internet at large.
Here’s a nice article that gives a quick, but useful intro: