Visual Studio Orcas Beta 1 was release last week and it fully supports LINQ.  However the ADO.NET Entity Framework has been cut from Orcas. 

LINQ to SQL and the designer will be included.  News on Frans Bouma's blog.

Scott Guthrie in his Channel9 interview on Silverlight said that Silverlight will support LINQ ... getting the SDK now to try it out.

Here's a screen shot of silverlight and some code in the background in Orcas - the code and a screencast is available on Channel9: