Not sure I can give a complete answer here but I spent a lot of time at PDC trying to figure this out myself so here’s a go...
The short answer here is that ADO.Net Data Services are meant to provide an interface to the ADO.Net framework (DataContext, Datasets, DataTables etc…) that is seamlessly integrated with the web, using URIs and well-known data to point to your Data. ADO.Net Data Services are also meant for programming ADO.Net in the cloud. Microsoft's Cloud services, "Azure", is a new cloud programming platform that will be release in the near future. For more info on Cloud Services go here.
One cool thing I found out about ADO.Net Data Services and the cloud is that the underlying DataContext that acts as the provider to your data source can be easily configured to point your resource in the cloud, or, an on premise database. This allows you to switch your DataContext without changing any code!!! (I was impressed by that if you couldn't tell)
WCF Rest Services are just normal WCF Services that have added functionality so that they can be consumed in a RESTful manner (URI vs URL, Usage of HTTTP Verbs, Usage of Different Data Transfer Formats like JSON, YAML, etc...). So for example, if you had a stock ticker web service that you built in WCF, instead of requiring the caller to use a heavy WSDL implementation and ASMX, you could just use the WCF Rest functionality to publish that service as a JSON service instead and have it consumed via AJAX without having to point to an ASMX resource. For more info on WCF using rest check out the PDC Presentation
Those two technologies DO NOT compete.
WCF is for developer writing services.
ADO.NET Data Services is for remotely hosting and querying your data.
Best Answer
Take a look at this tip from Alex James.