I think the key thing with VAR is to only use it where appropriate i.e. when doing things in Linq that it facilitates (and probably in other cases).
If you've got a type for something in the then you should use it - not to do so is simple laziness (as opposed to creative laziness which is generally to be encouraged - good programmers oft work very hard to be lazy and could be considered the source of the thing in the first place).
A blanket ban is as bad as abusing the construct in the first place but there does need to be a sensible coding standard.
The other thing to remember is that its not a VB type var in that it can't change types - it is a strongly typed variable its just that the type is inferred (which is why there are people that will argue that its not unreasonable to use it in, say, a foreach but I'd disagree for reasons of both readability and maintainability).
I suspect this one is going to run and run (-:
Murph