In working on a green field system recently (green field means it's new from scratch development) the discussion for a series of services turned to the subject of which type of data interaction should be used. Specifically, should the service be designed using message contracts or data contracts?
Since it became clear that the basic inflection points were not well understood, I had to hold an impromptu clinic. After we finished, I wrote down the salient points and turned it into this post.
The first thing to consider when choosing packaging formats is whether the messages need to be conformed. You see, many technologies don't comply with the published contract specifications choosing instead to rely on the lowest level XML serialization for interchange. If these messages already are in use, or you intend to interoperate with a system that has such restrictions, the choice is usually made for you.
If you are playing green field (as in the conversation sparking this post) it helps to understand that data contracts have good portability which makes them widely applicable. Message contracts are less capable and therefore can have less portability .
So the less conformant you are required to be, the more reason to choose data contracts. The more conformant your requirements, the more likely you will need message contracts or even base XML serialization.