From MSDN:
  However, the use of var does have at
  least the potential to make your code
  more difficult to understand for other
  developers. For that reason, the C#
  documentation generally uses var only
  when it is required.
I really, really don't like implicit typing. On the surface it tends to make code more readable, but can lead to lots of problems down the road. If a dev changes a variable initializer, say, from
var myFloat=100f;
to
var myFloat=100;
or
var myFloat=100.0;
The type will change, resulting in whole slew of compiler errors or, if it's in a web view and you're not using the post-build step to precompile your views, a whole slew of runtime errors that won't be caught without effective pre-deployment testing.
Implicit typing also doesn't work everywhere (from the same MSDN link)
  var can only be used when a local
  variable is declared and initialized
  in the same statement; the variable
  cannot be initialized to null, or to a
  method group or an anonymous function.
  
  var cannot be used on fields at class
  scope.
  
  Variables declared by using var cannot
  be used in the initialization
  expression. In other words, this
  expression is legal: int i = (i = 20);
  but this expression produces a
  compile-time error: var i = (i = 20);
  
  Multiple implicitly-typed variables
  cannot be initialized in the same
  statement.
  
  If a type named var is in scope, then
  the var keyword will resolve to that
  type name and will not be treated as
  part of an implicitly typed local
  variable declaration.
Keeping your code consistent (in this case, using explicit typing everywhere) is a very, very good thing. In my opinion, var is lazy and provides no real benefit, and introduces yet another potential point of failure in an already complex process.
2017 Update
I completely changed my mind. When working in C#, I use var most of the time (excepting things like interface-type variables and such). It keeps the code terse which improves readability. Still, though - pay attention to what the resolved type really is.
     
    
auto.