I've first implemented Tombstoning MVVMLight ViewModels using the default DataContractSerializer. I save the ViewModel when closing the application to persistent storage by using the IsolatedStorageSettings.ApplicationSettings. When deactivating the application I saved the ViewModels to transient storage using PhoneApplicationService.Current.State. This method has some limitations regarding maximum storage size. Second problem was that the MVVMLight ViewModelBase class constructor was not public and therefor could not be serialized. I fixed this by just downloading the sources and use the new assemblies.
I wasn't really satisfied. When I was at the DotNed meeting at Qurius there was a discussion about saving states and what serializers would be a good option. The SilverLightSerializer was the one I remembered, so back at home I did some digging and found that LocalJoost blogged about it.
I implemented the SilverLightSerializer and just needed to replace the saving and loading state parts. Than I tested the application and found out the application bar was gone after a deactivate / activate cycle.
I also had this problem before using the DataContractSerializer. That was fixed by decorating the public ApplicationBar properties with [IgnoreDataMember] attribute. The SilverLightSerializer skips properties from being serialized which are decorated with the [DoNotSerialize] attribute. So I replaced the [IgnoreDataMember] with [DoNotSerialize] and the ApplicationBar was back again.
Hopes this saved you some hours of searching and testing.