Let me try to ask this question from a different angle.
I noticed that everytime an aspx page gets rendered in the browser using the "web site" model, a random assembly gets created 'on-the-fly' in the Temporary ASP.NET files. Analyzing the assembly in Reflector shows that the class created for any given .aspx file is under the "ASP" namespace.
So, starting with a empty "Temporary ASP.NET Files" directory, I opened my ASP.NET "website" in VS2008, and launched the default page. Immediately I observed that a random directory was generated inside that folder. Working my way down the path, I found 2 DLLs created: App_Code.1lywsqqz.dll, and App_Web_iohekame.dll. I assume that all the .aspx pages in the website get compiled into App_Web dll and everything in App_Code folder gets compiled into App_Code.dll.
So if my App_Code C#/VB.net files are under the "ASP" namespace, and my App_Web files are created under the "ASP" namespace, how come I still get an error "Could not load type 'ASP.NothwindDataContext'?
Somebody said "you don't need namespaces in the App_Code folder", but I tried it without and still get "Could not load type 'NorthwindDataContext'".
So what's going on between the App_Code folder, the rest of the site, and namespaces?
EDIT: Here's my LinqDataSource in my .aspx file:
<asp:LinqDataSource ID="LinqDataSource1" runat="server"
ContextTypeName="NothwindDataContext" EnableUpdate="True"
TableName="Categories">
</asp:LinqDataSource>
Neither "NorthwindDataContext", nor "ASP.NorthwindDataContext" works.