EntityFramework should go in the Data Access Layer. To expose it up to the presentation layer tightly couples your presentation to the database, allowing changes at the database level to flow up to the presentation layer.
What we have done on some of our projects is to use entity framework at the DAL, transform the entities to our business objects (which are actually quite simple object primarily used as DTO's as most of our logic is contained in services that act on the objects - this route isn't for everyone, but it fitted with what that architecht wanted).