Thanks for the answers so far - they have been a big help in understanding the pros/cons of both approaches. I have one thing to add that no one else has mentioned.
Over-posting attack
A worrying disadvantage with binding directly against DB entities is an "over-posting attack". This is where the attacker, using a tool no more advanced than FireBug, can insert form fields that are not intended to be editable by the user, but which do exist on the DB entity.
Consider an "Edit my profile" page. Your view might look like this:
@using(Html.BeginForm() {
<div>
@Html.LabelFor(x=> x.FirstName)
@Html.TextBoxFor(x=> x.FirstName)
</div>
<div>
@Html.LabelFor(x=> x.LastName)
@Html.TextBoxFor(x=> x.LastName)
</div>
<input type="Submit" value="Save" />
}
It would render the following HTML:
<form action="/profile/edit" method="post">
<div>
<label for="FirstName">FirstName</label>
<input type="text" name="FirstName" value="" />
</div>
<div>
<label for="LastName">LastName</label>
<input type="text" name="LastName" value="" />
</div>
<input type="Submit" value="Save" />
</form>
Using FireBug, an attacker merely needs to insert a chunk of HTML inside the form:
<input type="hidden" name="IsAdmin" value="true" />
...and suddenly users are able change data in very unexpected and harmful ways.
Here are some even scarier hidden form fields:
<input type="hidden" name="ShoppingCart.Items[0].Price" value="0.01" />
<input type="hidden" name="BankAccount.Balance" value="1000000" />
<input type="hidden" name="User.Administrator.Password" value="hackedPassword" />
Ouch!
Info taken from:
http://hendryluk.wordpress.com/tag/asp-net-mvc/