i have been successfully working with linq2sql and the linq DTOs (the classes that are created by linq2sql) ....
I am confused, i have the task of updating an old ap
This is one of the best discussions of the topic that I've seen:
http://blog.wekeroad.com/blog/linqtosql-momma-said-knock-you-out/
In the end, coupling and cohesion decisions are situational and you have to decide what is best for your situation.
When your application outgrows LinqToSql, how easy will it be to yank out LinqToSql and insert another ORM in it's place? That is something you have to give serious thought to.
In general, minimize the knowledge your business layer has about LinqToSql. LinqToSql should be completely hidden from your UI layer (your business layer makes up a good chunk of this shield). It's very easy to go down the wrong architectual path with LinqToSql and it can be very difficult to get back on the right path after the fact.