1) They can't "kill" Linq-to-SQL as it is already part of the .net framework. What they can do is stop adding features to it. That doesn't prevent the thousands of developers out there that are already using L2S from extending it and improving it. Some core areas are tricky to touch but they're solid already and the missing designer features can easily be bolted on.
2) One of the PDC EF sessions show that they have learnt a couple of lessons from the EFv1 fiasco and they are now copy-and-pasting a lot of the goodies from L2S into EF and pretending it is new EF stuff. In other words, L2S version two has just been "relabelled" EF.
3) LINQ as such (Language Integrated Query) is the best thing since sliced ice-cream and it can be used with a lot of other things than L2S (Linq to objects, Linq to entities, Linq to XML, Linq-to-anything). So the DP group's attempt to force [the vast masses of] L2S adopters over to [the less popular and currently flawed] Entity Framework is no reason to not learn Linq.
Also see this thread (which is what I believe partly triggered Tim's blog post):
http://forums.microsoft.com/MSDN/ShowPost.aspx?PostID=4061922&SiteID=1
Update 1: The Dec 2008 issue of Visual Studio Magazine cover story by Roger Jennings is a good read on the topic, with some L2S vs EF comparisons: http://visualstudiomagazine.com/features/article.aspx?editorialsid=2583
Update 2: Anders Hejlsberg was quoted in Redmond Developer News as saying "LINQ to SQL is not dead. I can assure you, it is not dead. Nothing ever goes away. We have never done that and we never will."
http://reddevnews.com/blogs/weblog.aspx?blog=3016