I'm always thought that what makes or breaks any ORM layer for use in any but the simplest of applications is the underlying SQL code that's generated. In fact, I'm a proponent of using stored procedures with any ORM for best performance. So it was with great interest that I came across the blog posting "Improvements to the Generated SQL in .NET 4.0 Beta1" by the folks that are working on the Entity Framework SQL Server provider at Microsoft. These improvements, along with some others I wrote about in May, show they're serious about improving TSQL performance in the next release of Entity Framework.
I'd really like to see support in the EDM provider for SQL Server (and LINQ to SQL) for the spatial and hierarchyid data types (and UDTs in general), table-valued parameters, filestream through the streaming APIs, and better support for stored procedures (beyong the ComplexType generation that's in EDM 4.0 beta) and UDFs. This would complete and enhance the SQL Server support in future.