I have struggled with this myself. There are cases where a DTO makes sense to use in presentaton. Let's say I want to show a drop down of Companies in my system and I need their id to bind the value to.
Well instead of loading a CompanyObject which might have references to subscriptions or who knows what else, I could send back a DTO with the name and id. This is a good use IMHO.
Now take another example. I have an object which represents an Estimate, this estimate might be made up labor, equipment etc, it might have lots of calculations that are defined by the user which take all these items and sum them up (Each estimate could be different with different types of calculations). Why should I have to model this object twice? Why can't I simply have my UI enumerate over the calculations and display them?
I generally do not use DTO's to isolate my domain layer from my UI. I do use them to isolate my domain layer from a boundary that is outside of my control. The idea that someone would put navigation information in their business object is ridiculous, don't contaminate your business object.
The idea that someone would put validation in their business object? Well I say that this is a good thing. Your UI should not have sole responsability to validate your business objects. Your business layer MUST do its own validation.
Why would you put UI generation code in a busienss object? In my case I have seperate objects which generates the UI code seperatley from the UI. I have sperate objects which render my business objects into Xml, the idea that you have to seperate your layers to prevent this type of contamination is so alien to me because why would you even put HTML generation code in a business object...
Edit
As I think a little bit more, there are cases where UI information might belong in the domain layer. And this might cloud what you call a domain layer but I worked on a multi-tenant application, which had very different behavior both UI look and feel and functional workflow. Depending on various factors. In this case we had a domain model that represented the tenants and their configuration. Their configuration happened to include UI information (Label's for generic fields for example).
If I had to design my objects to make them persistable, should I also have to duplicate the objects? Keep in mind if you want to add a new field now you have two places to add it. Perhaps this raises another question if your using DDD, are all persisted entities domain objects? I know in my example they were.