The XmlSerializer found in the .NET Compact Framework has a very different implementation than the one found in the full .NET Framework.  The reasons for the differences include size and performance constraints that make the desktop's XmlSerializer inappropriate for devices. 

As a result of the different implementation, there are inevitably going to be differences between how each serializer turns objects into XML and back again.  We try to minimize these differences so that your C# code will run on NetCF and desktop in a very portable way.  When we find differences, we have to weigh the consequences of possibly breaking backward compatibility with applications written for earlier versions of NetCF against breaking compatibility with desktop for current and future applications.

One area where cross-platform compatibility becomes particularly important is in web services.  When you generate web service proxies for your NetCF applications using Visual Studio's Add Web Reference function (or the command line wsdl.exe, xsd.exe, or NetCFSvcUtil.exe tools) you expect those proxies to serialize to XML that the service is expecting.  These tools are generally developed and tested against the desktop's version of the XmlSerializer more thoroughly than against the NetCF XmlSerializer.  So any differences in how NetCF's XmlSerializer works could cause incompatible xml to be sent to a service.

As I have been code reviewing .NET Compact Framework's version of the serializer and fixing bugs in it, I've come across a number of differences in how the two serializers behave that can affect web services.  Some of these fixes made it into NetCF 2.0 SP2.  Many more made it into NetCF 3.5.  But quite a few issues were discovered too late to fix in the NetCF 3.5 release. 

In an upcoming NetCF release there are likely to be some breaking changes to the way the XmlSerializer works in order to improve web service and desktop compatibility.  This is likely to only affect applications that use multiple namespaces in a single type that is being serialized as that is where most of the bugs seem to be.

You can prepare for these changes by testing your application on the full .NET Framework today.  If it runs correctly there, then it will probably run correctly on a future version of the .NET Compact Framework. If you notice that the XML the desktop produces is different than what NetCF produces, you will probably need to adjust your code so that it produces the desired XML on the full Framework, and consider releasing a service pack for your own application to your customers who are using new versions of NetCF.

A full list of breaking changes is published with each release of the .NET Compact Framework.  You should review those if your NetCF app uses the XmlSerializer.