One of the interesting points about VS 2005's data story is the Data Sources window. I like to think of the Server Explorer as a list of all server resources you have access to, and the Data Sources window as the data that you are working with for your current application. That's why the Data Sources window allows you to focus on local data, remote data, web services and objects as data sources, providing drag and drop control creation functionality.

This blog entry by Steve Lasker talks some more about the decisions made as we enabled the data sources window.