The xsd.exe tool predates WCF and doesn't know anything about [DataContract] and [DataMember]. If you do you xsd.exe, you'll have to switch WCF to use the XmlSerializer instead of its default DataContractSerializer for serializing the data contracts.
The WCF equivalent for xsd.exe is svcutil.exe - it has a parameter /dconly which creates the Data Contracts only, from a given XSD file. This will generate a C# or VB.NET file for you, containing the data contracts nicely annotated.
Usage:
svcutil.exe (name of your XSD).xsd /dconly
This would generate a *.cs file by the same base name in your directory.
In my experience, svcutil.exe is quite picky about its XML structures - so don't be surprised if it barks at you with tons of warnings and/or errors.