How can I make a Datatemplate for a ViewModel blendable (designable in expression blend). When I go to resources and try to edit the DataTemplate directly all I see on the Drawi
This strategy will allow you to see how the DataTemplate will work while editing it directly, however you won't be able to see the result on any view that utilizes that DataTemplate unless you actually run the app. This is a limitation of Blend at the moment due to the fact that they don't appear to be using Mocks, but rather complete replacement objects. If blend ever adds the ability to create a new fake data source by clicking on "New DataSource -> Based on Referenced Object -> MyCustomerObject", then you will be in business.
If I want to use acutal ViewModel mocks I guess it is the best way to create actual ViewModel instances and the references them with d:DataContext (e.g. using a ObjectDataProvider or x:Static)