I was reading Darren David's blog entry on code generation from xsd files. Sadly, he references xsd.exe that generates Xml serialization code.
If you're using .net 3, the new kid on the block is svcutil.exe that will generate real DataContracts that will give you a smooth path to Indigo (hmmm, WCF).
Sadly, the documentation focuses mainly on generating the client code rather than the DataContract serialization code. There is one page detailing the process: Importing Schema to Generate Classes. Choose to not generate the client and only generate data contracts from your xsd schema and you'll be done, the v3 way.