I'm not sure I'm completely happy that throwing exceptions in web services is a good idea. I wouldnt mind as much if it wasn't for the stack trace. This is not something I wan't.
I have researched around several implementations and there really doesn't seem to be a consensus on this. CampaignMonitor for example does return a Result object, yet others don't.
Architecturally, I'm not sure returning a return object makes sense, surely an exception is an exception, but what I do like about a Return object is that it is a more graceful solution for the end user.
Does anyone have any better solutions?
EDIT
BTW I am using ASMX web services, where turning CustomErrors on is not an option.
What stack trace are you talking about? Have you tried this?
In both ASMX and WCF services, an uncaught exception will be translated into a SOAP Fault. In both cases, they can be configured to not include any stack trace. In fact, that's the default in WCF.
So, the proper way to return an error like this is through a fault. One way to generate faults is to throw and not handle an exception.