Unfortunately, SQL CE is not supported on the phone, so you need to use one of the other available databases .
Although this is only in CTP format, I recommend taking a look at the Sync Framework. These are your synchronization requirements. Nothing but trivial, you really should avoid reinventing the wheel by creating your own synchronization service.
Even if you used Sync Framework, I do not understand why this will stop you on the Entity Framework on the desktop.
AFAIK there is currently no ORM for WP7, so you need to create your own DAL.
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