Entity Framework with strongly-typed MVC

I'm using the ASP.NET MVC and the ADO.NET Entity Framework together.

I want my Views and Controllers strongly-typed.

But how am I supposed to handle entity associations?

Here's a simple example:

A Person has one Department. A Department has zero or more People.

My controller passes an instance of a Person object and a collection of all the Department objects to the View.

public class PersonController : Controller
{
    ...

    //
    // GET: /Person/Create

    public ActionResult Create()
    {
        Person Model = new Person();
        Model.Id = Guid.NewGuid();
        ViewData["Departments"] = db.Department;
        return View(Model);
    } 
    ...
}

My View has a "Department" DropDownList with all departments as options.

<% using (Html.BeginForm()) {%>

    <fieldset>
        <legend>Fields</legend>
        <p>
            <label for="Id">Id:</label>
            <%= Html.TextBox("Id") %>
            <%= Html.ValidationMessage("Id", "*") %>
        </p>
        <p>
            <label for="Name">Name:</label>
            <%= Html.TextBox("Name") %>
            <%= Html.ValidationMessage("Name", "*") %>
        </p>
        <p>
            <label for="Department">Family:</label>
            <%= Html.DropDownList("Department", new SelectList((IEnumerable)ViewData["Departments"], "Id", "Name"))%>
            <%= Html.ValidationMessage("Department", "*")%>
        </p>
        <p>
            <input type="submit" value="Create" />
        </p>
    </fieldset>

<% } %>

But, the Person object posted to the controller has no Department and fails!

public cl