var counter = 0;

// or

for (var i = 0; i < maxValue; i++)
    Console.WriteLine(i);

MyObject obj = new MyObject();

IT>MyObject obj = new MyObject();
IT>

There are two reasons, one which exists today, one which will crop up in 3.0.
The first reason is that this code is incredibly ugly because of all the redundancy:

Dictionary<string, List<int>> mylists = new Dictionary<string, List<int>>();

And that's a simple example – I've written worse. Any time you're forced to type exactly the same thing twice, that's a redundancy that we can remove. Much nicer to write

var mylists = new Dictionary<string, List<int>>();

and let the compiler figure out what the type is based on the assignment.

Second, C# 3.0 introduces anonymous types. Since anonymous types by definition have no names, you need to be able to infer the type of the variable from the initializing expression if its type is anonymous.

IT>MyObject obj = new MyObject();
IT>

You may find that var can also be useful with query expressions in which the exact constructed type of the query variable is difficult to determine. This can occur with grouping and ordering operations.

The var keyword can also be useful when the specific type of the variable is tedious to type on the keyboard, or is obvious, or does not add to the readability of the code. One example where var is helpful in this manner is with nested generic types such as those used with group operations. In the following query, the type of the query variable is IEnumerable<IGrouping<string, Student>>. As long as you and others who must maintain your code understand this, there is no problem with using implicit typing for convenience and brevity.

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.