I forgot to mention this is VS 2005. Haven't DataSets been phased out? The short answer is No. Where specifically did you hear/read this?
DataSets received some enhancements in VS2005. (including the fact that they re-wrote the indexing engine in ADO.NET for better performance).
VS2005 has new List Classes (as part of Generics) that have some of the capabilities of the dataset. But phased out? No.
Kevin