This new class ServiceOnlyContractClass
will inherit all the fields and everything from its base class, but since it does not have any [DataContract] or [DataMember] attributes, it won't show up in your service contract (the WSDL/XSD).
If that's what you want, yes, that's the way to do it. The DataContract and DataMember attributes are specific, e.g. you have to explicitly set them and they will not be inherited to derived classes.
UPDATE: .NET 3.5 Service Pack 1 introduced a new set of rules for the WCF DataContractSerializer, and it looks as if any public class and any of its public properties will be serialized by the DCS as of .NET 3.5 SP1. This was introduced to simplify life and allow serialization of POCO (Plain Old CLR Object) classes without decorating them with attributes - but at the same time, there doesn't seem to be a way to turn off that feature if you don't want it.....
For more details see DataContracts without attributes