Developing n-layered application with DDD (o better DDDD because we are using WCF) using Microsoft technology (where we have full controll of all component), the best choise see
I really can recommend Julie Lerman's Programming Entity Framework. She goes in depth about simple poco's, dto's and Self Tracking Entities. Advantages and disadvantages are described. But off course depending a lot on application requirements and personal taste.
So I can't give you an exact answer because the question is to general for that. But reading the book should give you a taste of the possible alternatives and can help you in making these kind of design decisions. I'm working with Self Tracking Entities in combination with a Business Access Layer, Serive Layer, WCF, Win / WPF clients. And expanding it in the future most probably with ASP.NET