I just wanted to post a little fyi on connecting to Sql Server from WebMatrix (Razor, ASP.NET Web Pages) using Entity Framework Version 4.  Connecting seems to work perfectly for me.  I opened up my web site project in Visual Studio 2010.  I then created an ADO.NET Entity Data Model (aka .edmx file).  This file went into the App_Code directory of the project.  I then wrote the code below in a cshtml file:

@{
    ExampleModel.ExampleEntities ee = new ExampleModel.ExampleEntities();
    var lst = (from l in ee.Customers select new { l.CustomerID, l.Name });
    Response.WriteJson(lst);
}

As you can see, the code is fairly simple.  I create the entity connection, create the query, and then pass the query to Response.WriteJson() method.  The Response.WriteJson() method causes the query to execute and then serialize the result. 

Personal Note: One thing to note is the creation of the object with just the CustomerID and Name values.  This is due to a serialization bug in the first beta of WebMatrix.  Hopefully, this will get resolved in the next ctp/beta of WebMatrix.