WPF MVVM Why use ContentControl + DataTemplate Views rather than straight XAML Window Views?

People use DataTemplates that way when they want to dynamically switch Views depending on the ViewModel:

<Window>
    <Window.Resources>
       <DataTemplate DataType="{x:Type local:VM1}">
          <!-- View 1 Here -->
       </DataTemplate>

       <DataTemplate DataType="{x:Type local:VM2}">
          <!-- View 2 here -->
       </DataTemplate>
    </Window.Resources>

    <ContentPresenter Content="{Binding}"/>

</Window>

So,

if Window.DataContext is an instance of VM1, then View1 will be displayed,

and if

Window.DataContext is an instance of VM2, then View2 will be displayed.

Granted, it makes no sense at all if only 1 View is expected, and never changed.

Since in VaD the view models know nothing about the views, you can build a fully functioning application entirely made up of view models only and no views. This leads to the possibility of writing an application that can be driven entirely by code. This in turn leads to the possibility of performing integration testing without the GUI. Integration testing through the GUI is notoriously fragile - while testing through view models should be more robust.

From my personal experience: Both work models are aviables, depending of what you want, and depending of the application requirements. The idea behind VaD is decopling the content, and the container. If you implement VaD you can use this template (by default) when ever you show any item of this type. You can use it in ItemsControls (lists, listviews, grids, etc) and in ContentControls only making bindings. Like you said, VaD works for switching the window's content with out closing and opening a new. Also you can define the view using UserControls, then you take control if focused elements, and also you can manage code behind. So, your data template may be like this:

<ResourceDictionary xmlns="http://schemas.microsoft.com/winfx/2006/xaml/presentation"
xmlns:x="http://schemas.microsoft.com/winfx/2006/xaml"
xmlns:vms="clr-namespace:MVVMProject.ViewModels">
<DataTemplate DataType="{x:Type vms:ExampleVM}" >
    <CustomUserControl A="{Binding A}" B="{Binding B}" DataContext="{Binding}" .../>
</DataTemplate>

You also in an UserControl may set dependency properties, thats make easier the job, because allow bindings and decoupling the app.

But of course, if you app doesn't require dynamically content switching, it is fine to use VaW for the main window, or any other window. In fact, you can use both VaW and VaD. This last one can be used for inner items in the app, that doesn't require windows. You shoose what is better for you, depending of application requirements, and the time aviable for developing the app. Hope this personal experience helps...