You can use whatever model you feel comfortable with, yes all of your properties will need INotifyPropertyChanged behavior. How this will effect the service layer is entirely down to your implementation.
I'm assuming that you ment that you bind to your DTO's in your view?
How I see it is that there is an impedence mismatch between the layers of the application, that is your
Domain Model probably looks simliar to your Relational Model, with subtle but crucial differences. There is also
a mismatch between the Domain Model and your DTO's (objects may be flattened, computed properties, etc, ...). It's tempting to bind directly to the DTO's as they are probably designed to have what you need for the particular operation, however there is also an impedence mismatch between the DTO and what is needed by the view in order to acheive the desiged outcome. This is where the View Model comes in. The view model has responsibility to proxying the DTO properties to the view, it is responsible for letting the view know if there are validation errors, and routes commands to the appropriate handler (Save, Delete, etc, ...).
I tend to set things up in the following way :
// POCO object. Serializable.
public class AddressDto
{
public int Id { get; set; }
public string Street { get; set; }
public string City { get; set; }
public string Country { get; set; }
}
// IDataErrorInfo for validation.
public class AddressViewModel : INotifyPropertyChanged, IDataErrorInfo
{
private readonly AddressDto addressDto;
public AddressViewModel(AddressDto addressDto)
{
this.addressDto = addressDto;
}
public int Id { /* get and set for property changed event and update dto */ }
public string Street { /* get and set for property changed event and update dto */ }
public string City { /* get and set for property changed event and update dto */ }
public string Country { /* get and set for property changed event and update dto */ }
...
// IDataErrorInfo implementation
}
public class EditAddressViewModel : INotifyPropertyChanged
{
public AddressViewModel Address { /* get and set for property changed event */ }
public ICommand Save { /* setup command */ }
public ICommand Cancel { /* setup command */ }
private void Save()
{
}
private void Cancel()
{
}
}
Your EditAddressView would then bind to the EditAddressViewModel. Basically the rule is all of your UI behavior should be expressed in terms of your view model.
Yes that does mean extra work, howerver there are things you can do to simplify things a bit (code generation etc). I'm actually working on a library that aims to simplify whole MVVM process using a fluent api. Check it out at http://fluentviewmodel.codeplex.com/