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EF maps .NET objects to the database. The idea is that your database can change, and the EF mapper can protect your application from having to deal with these changes. EF is a competitor of the NHibernate product. NHibernate is an open source alternative. It is a surprisingly good implementation of an ORM.
Developers can use EF4 to help code web services. While EF4 may still not live up to the NHibernate standard, Microsoft is positioning EF4 as the main ORM.