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How can my Main() method be holding references to variables that have been disposed and are no longer used?

I'm working on fixing memory leaks in a large project, and so I've shrunk it down into one Main() method wherein a reference type object Obj1 containing a reference to another reference type object Obj2. Then, I create another object of type Obj1 which contains a reference to the same Obj2 object. Both of the objects are in their own using blocks, like so:
using (dynamic obj1_a = new Obj1(args))
{
do some actions...
using (dynamic obj1_b = new Obj1(args))
{
do some more actions...
//Memory Snapshot 1 taken here
}
}
GC.Collect();
GC.WaitForPendingFinalizer();
GC.Collect();
//Memory Snapshot 2 taken here
Somehow, when I take the 2 snapshots at the points commented above and compare them, .NET Memory Profiler indicates that even though the two objects obj1_a and obj1_b have been disposed, they haven't been GC'ed. When I examine the reference graphs, I see that the memory profiler says that both objects are referenced by my Main() method itself. I've gone through the whole code of the Main() method (it's not very complex, just creating, slightly modifying and then testing for garbage-collection) to see if there is a variable reference remaining to these two objects but there are none. How is it still possible that my Main() method could be holding these objects in memory? It's important that they get garbage collected (or at least are able to get GC'ed) because they contain references to many more reference and value types and the program becomes quite a memory drain without it.

even though the two objects obj1_a and obj1_b have been disposed, they haven't been GC'ed
Your statement presupposes that there is a connection between an object being disposed and it being deallocated by the garbage collector. Make sure you fully understand the following statement: disposing an object has no effect whatsoever on whether it is eligible to be collected. From the GC's perspective, Dispose is just a method. You might as well say "even though I called ToString on an object, it still hasn't been GC'd". What does ToString have to do with the GC? Nothing. What does Dispose have to do with the GC? Nothing whatsoever.
Now, this slightly overstates the case. A finalizable object should implement IDisposable, and its Dispose should call SuppressFinalization. That has an effect on the garbage collector because finalizable objects always live at least one collection longer than they otherwise would because the finalization queue is a root. But here the effect is not due directly to Dispose; it is simply a convention that disposers suppress finalization. It is the suppression which has an effect on the GC behaviour.
How is it still possible that my Main() method could be holding these objects in memory?
An object is collected by the GC when the GC determines that there is no living root containing a direct or indirect reference to the object.
A local variable in an active method is a living root.
The runtime is permitted to, entirely at its discretion and for any reason whatsoever, to both (1) determine that a local is never read again and treat it as dead early, and (2) keep a local alive longer even when control has passed beyond the local variable declaration space of that variable.
Even though your obj1_a and obj1_b are out of scope by the time the GC runs, the runtime is entirely permitted to pretend that they were declared at the top scope of Main, and is permitted to keep them alive until Main completes, which is after the GC runs.
It's important that they get garbage collected (or at least are able to get GC'ed) because they contain references to many more reference and value types and the program becomes quite a memory drain without it.
If you require fine-grained control over lifetimes of objects then languages which have automatic memory deallocation do not meet your requirements.

What happens to 'object' after local scope?

I am eager to know what happens to a object in .NET when it falls out of scope. Something like this:
class A
{
ClassB myObjectB = new ClassB();
}
//what happens to object at this point here?
What happens in the memory? Does GC get called when it falls out of scope and loose it reference in the heap?

What happens in the memory? Does GC get called when it falls out of scope and loose it reference in the heap?
No - the GC doesn't get called at this point.
What happens is that the object is left in memory, but is now "unrooted" - basically, there are no references to that object from any other object. As such, the object is now eligible for garbage collection.
At some point in the future, the GC will run. When this happens, the unrooted object will now be eligible for garbage collection. Depending on which generation holds the object, it may or may not be cleaned at that point. Eventually, if the program continues executing and if memory pressure causes the appropriate generation to be collected, the memory for that object will be reclaimed.
There is no definite point in time when this will happen (unless you explicitly call GC.Collect, which is a bad idea). However, with managed code, you don't really need to worry about when this will happen. Just assume that it will happen when and if appropriate for your specific application.

Following from pst's comment, a better example might be this:
void M()
{
ClassB myObjectB = new ClassB();
}
//what happens to object at this point here?
In this example, myObjectB is a local variable rather than a field. So, what happens when the local variable goes out of scope? Nothing! Scope has nothing to do with object lifetime in C#.
What really happens is that the JIT compiler decides to release the object at some point. That can be before the end of the variable's scope, if the variable is not going to be used in the rest of the method. Once the object is no longer referenced, as other answers have also mentioned, it becomes eligible for collection by the GC. It is not actually collected until the GC runs (actually, until the GC collects the generation in which the object is living).
As pst implied, a field is a poor example because it will always be reachable whenever its containing object is reachable, so the separation between scope and object lifetime is even greater:
class A
{
private object o = //whatever
}
void B()
{
var a = new A();
// here, the field o is not in scope, but the object it refers to is reachable and cannot be collected.
GC.KeepAlive(a);
}

I find "falling out of scope" to be a much more C++-specific way of thinking of things, where at the end of a given scope an object with automatic storage is freed and has its destructor called.
In the C# world, there's no "falling out of scope". Variables (read: names) exist in a certain scope, and that's it. The GC really has no concern for this; an object can be collected before the end of its name's scope even exits, or long afterwards depending on what references it and when the GC decides a collection is necessary.
The two concepts should then be divorced and reasoned about separately. Scoping is all about names, whereas garbage collection cares only about the reachability of objects. When an object is no longer reachable from one of the known roots, it will be scheduled for collection.

If there's nothing referencing the object, it gets eventually collected by GC. The thing is, you can't predict WHEN exactly it will happen. You just know, it will happen.

Generally speaking, Garbage Collection happens at 3 distinct generations (0, 1, or 2). When each of these is collected depends on how much resources are needed by the OS.
A call to GC.Collect() will collect all of the available resources but it is possible to define which generation of resources to collect.

What is the correct way to free memory in C#

I have a timer in C# which executes some code inside it's method. Inside the code I'm using several temporary objects.
If I have something like Foo o = new Foo(); inside the method, does that mean that each time the timer ticks, I'm creating a new object and a new reference to that object?
If I have string foo = null and then I just put something temporal in foo, is it the same as above?
Does the garbage collector ever delete the object and the reference or objects are continually created and stay in memory?
If I just declare Foo o; and not point it to any instance, isn't that disposed when the method ends?
If I want to ensure that everything is deleted, what is the best way of doing it:
with the using statement inside the method
by calling dispose method at the end
by putting Foo o; outside the timer's method and just make the assignment o = new Foo() inside, so then the pointer to the object is deleted after the method ends, the garbage collector will delete the object.

1.If I have something like Foo o = new Foo(); inside the method, does that
mean that each time the timer ticks,
I'm creating a new object and a new
reference to that object?
Yes.
2.If I have string foo = null and then I just put something temporal in foo,
is it the same as above?
If you are asking if the behavior is the same then yes.
3.Does the garbage collector ever delete the object and the reference or
objects are continually created and
stay in memory?
The memory used by those objects is most certainly collected after the references are deemed to be unused.
4.If I just declare Foo o; and not point it to any instance, isn't that
disposed when the method ends?
No, since no object was created then there is no object to collect (dispose is not the right word).
5.If I want to ensure that everything is deleted, what is the best way of
doing it
If the object's class implements IDisposable then you certainly want to greedily call Dispose as soon as possible. The using keyword makes this easier because it calls Dispose automatically in an exception-safe way.
Other than that there really is nothing else you need to do except to stop using the object. If the reference is a local variable then when it goes out of scope it will be eligible for collection.1 If it is a class level variable then you may need to assign null to it to make it eligible before the containing class is eligible.
1This is technically incorrect (or at least a little misleading). An object can be eligible for collection long before it goes out of scope. The CLR is optimized to collect memory when it detects that a reference is no longer used. In extreme cases the CLR can collect an object even while one of its methods is still executing!
Update:
Here is an example that demonstrates that the GC will collect objects even though they may still be in-scope. You have to compile a Release build and run this outside of the debugger.
static void Main(string[] args)
{
Console.WriteLine("Before allocation");
var bo = new BigObject();
Console.WriteLine("After allocation");
bo.SomeMethod();
Console.ReadLine();
// The object is technically in-scope here which means it must still be rooted.
}
private class BigObject
{
private byte[] LotsOfMemory = new byte[Int32.MaxValue / 4];
public BigObject()
{
Console.WriteLine("BigObject()");
}
~BigObject()
{
Console.WriteLine("~BigObject()");
}
public void SomeMethod()
{
Console.WriteLine("Begin SomeMethod");
GC.Collect();
GC.WaitForPendingFinalizers();
Console.WriteLine("End SomeMethod");
}
}
On my machine the finalizer is run while SomeMethod is still executing!

The .NET garbage collector takes care of all this for you.
It is able to determine when objects are no longer referenced and will (eventually) free the memory that had been allocated to them.

Objects are eligable for garbage collection once they go out of scope become unreachable (thanks ben!). The memory won't be freed unless the garbage collector believes you are running out of memory.
For managed resources, the garbage collector will know when this is, and you don't need to do anything.
For unmanaged resources (such as connections to databases or opened files) the garbage collector has no way of knowing how much memory they are consuming, and that is why you need to free them manually (using dispose, or much better still the using block)
If objects are not being freed, either you have plenty of memory left and there is no need, or you are maintaining a reference to them in your application, and therefore the garbage collector will not free them (in case you actually use this reference you maintained)

Let's answer your questions one by one.
Yes, you make a new object whenever this statement is executed, however, it goes "out of scope" when you exit the method and it is eligible for garbage collection.
Well this would be the same as #1, except that you've used a string type. A string type is immutable and you get a new object every time you make an assignment.
Yes the garbage collector collects the out of scope objects, unless you assign the object to a variable with a large scope such as class variable.
Yes.
The using statement only applies to objects that implement the IDisposable interface. If that is the case, by all means using is best for objects within a method's scope. Don't put Foo o at a larger scope unless you have a good reason to do so. It is best to limit the scope of any variable to the smallest scope that makes sense.

Here's a quick overview:
Once references are gone, your object will likely be garbage collected.
You can only count on statistical collection that keeps your heap size normal provided all references to garbage are really gone. In other words, there is no guarantee a specific object will ever be garbage collected.
It follows that your finalizer will also never be guaranteed to be called. Avoid finalizers.
Two common sources of leaks:
Event handlers and delegates are references. If you subscribe to an event of an object, you are referencing to it. If you have a delegate to an object's method, you are referencing it.
Unmanaged resources, by definition, are not automatically collected. This is what the IDisposable pattern is for.
Finally, if you want a reference that does not prevent the object from getting collected, look into WeakReference.
One last thing: If you declare Foo foo; without assigning it you don't have to worry - nothing is leaked. If Foo is a reference type, nothing was created. If Foo is a value type, it is allocated on the stack and thus will automatically be cleaned up.

Yes
What do you mean by the same? It will be re-executed every time the method is run.
Yes, the .Net garbage collector uses an algorithm that starts with any global/in-scope variables, traverses them while following any reference it finds recursively, and deletes any object in memory deemed to be unreachable. see here for more detail on Garbage Collection
Yes, the memory from all variables declared in a method is released when the method exits as they are all unreachable. In addition, any variables that are declared but never used will be optimized out by the compiler, so in reality your Foo variable will never ever take up memory.
the using statement simply calls dispose on an IDisposable object when it exits, so this is equivalent to your second bullet point. Both will indicate that you are done with the object and tell the GC that you are ready to let go of it. Overwriting the only reference to the object will have a similar effect.

The garbage collector will come around and clean up anything that no longer has references to it. Unless you have unmanaged resources inside Foo, calling Dispose or using a using statement on it won't really help you much.
I'm fairly sure this applies, since it was still in C#. But, I took a game design course using XNA and we spent some time talking about the garbage collector for C#. Garbage collecting is expensive, since you have to check if you have any references to the object you want to collect. So, the GC tries to put this off as long as possible. So, as long as you weren't running out of physical memory when your program went to 700MB, it might just be the GC being lazy and not worrying about it yet.
But, if you just use Foo o outside the loop and create a o = new Foo() each time around, it should all work out fine.

As Brian points out the GC can collect anything that is unreachable including objects that are still in scope and even while instance methods of those objects are still executing. consider the following code:
class foo
{
static int liveFooInstances;
public foo()
{
Interlocked.Increment(ref foo.liveFooInstances);
}
public void TestMethod()
{
Console.WriteLine("entering method");
while (Interlocked.CompareExchange(ref foo.liveFooInstances, 1, 1) == 1)
{
Console.WriteLine("running GC.Collect");
GC.Collect();
GC.WaitForPendingFinalizers();
}
Console.WriteLine("exiting method");
}
~foo()
{
Console.WriteLine("in ~foo");
Interlocked.Decrement(ref foo.liveFooInstances);
}
}
class Program
{
static void Main(string[] args)
{
foo aFoo = new foo();
aFoo.TestMethod();
//Console.WriteLine(aFoo.ToString()); // if this line is uncommented TestMethod will never return
}
}
if run with a debug build, with the debugger attached, or with the specified line uncommented TestMethod will never return. But running without a debugger attached TestMethod will return.

Do you need to dispose of objects and set them to null?

Do you need to dispose of objects and set them to null, or will the garbage collector clean them up when they go out of scope?

Objects will be cleaned up when they are no longer being used and when the garbage collector sees fit. Sometimes, you may need to set an object to null in order to make it go out of scope (such as a static field whose value you no longer need), but overall there is usually no need to set to null.
Regarding disposing objects, I agree with #Andre. If the object is IDisposable it is a good idea to dispose it when you no longer need it, especially if the object uses unmanaged resources. Not disposing unmanaged resources will lead to memory leaks.
You can use the using statement to automatically dispose an object once your program leaves the scope of the using statement.
using (MyIDisposableObject obj = new MyIDisposableObject())
{
// use the object here
} // the object is disposed here
Which is functionally equivalent to:
MyIDisposableObject obj;
try
{
obj = new MyIDisposableObject();
}
finally
{
if (obj != null)
{
((IDisposable)obj).Dispose();
}
}

Objects never go out of scope in C# as they do in C++. They are dealt with by the Garbage Collector automatically when they are not used anymore. This is a more complicated approach than C++ where the scope of a variable is entirely deterministic. CLR garbage collector actively goes through all objects that have been created and works out if they are being used.
An object can go "out of scope" in one function but if its value is returned, then GC would look at whether or not the calling function holds onto the return value.
Setting object references to null is unnecessary as garbage collection works by working out which objects are being referenced by other objects.
In practice, you don't have to worry about destruction, it just works and it's great :)
Dispose must be called on all objects that implement IDisposable when you are finished working with them. Normally you would use a using block with those objects like so:
using (var ms = new MemoryStream()) {
//...
}
EDIT On variable scope. Craig has asked whether the variable scope has any effect on the object lifetime. To properly explain that aspect of CLR, I'll need to explain a few concepts from C++ and C#.
Actual variable scope
In both languages the variable can only be used in the same scope as it was defined - class, function or a statement block enclosed by braces. The subtle difference, however, is that in C#, variables cannot be redefined in a nested block.
In C++, this is perfectly legal:
int iVal = 8;
//iVal == 8
if (iVal == 8){
int iVal = 5;
//iVal == 5
}
//iVal == 8
In C#, however you get a a compiler error:
int iVal = 8;
if(iVal == 8) {
int iVal = 5; //error CS0136: A local variable named 'iVal' cannot be declared in this scope because it would give a different meaning to 'iVal', which is already used in a 'parent or current' scope to denote something else
}
This makes sense if you look at generated MSIL - all the variables used by the function are defined at the start of the function. Take a look at this function:
public static void Scope() {
int iVal = 8;
if(iVal == 8) {
int iVal2 = 5;
}
}
Below is the generated IL. Note that iVal2, which is defined inside the if block is actually defined at function level. Effectively this means that C# only has class and function level scope as far as variable lifetime is concerned.
.method public hidebysig static void Scope() cil managed
{
// Code size 19 (0x13)
.maxstack 2
.locals init ([0] int32 iVal,
[1] int32 iVal2,
[2] bool CS$4$0000)
//Function IL - omitted
} // end of method Test2::Scope
C++ scope and object lifetime
Whenever a C++ variable, allocated on the stack, goes out of scope it gets destructed. Remember that in C++ you can create objects on the stack or on the heap. When you create them on the stack, once execution leaves the scope, they get popped off the stack and gets destroyed.
if (true) {
MyClass stackObj; //created on the stack
MyClass heapObj = new MyClass(); //created on the heap
obj.doSomething();
} //<-- stackObj is destroyed
//heapObj still lives
When C++ objects are created on the heap, they must be explicitly destroyed, otherwise it is a memory leak. No such problem with stack variables though.
C# Object Lifetime
In CLR, objects (i.e. reference types) are always created on the managed heap. This is further reinforced by object creation syntax. Consider this code snippet.
MyClass stackObj;
In C++ this would create an instance on MyClass on the stack and call its default constructor. In C# it would create a reference to class MyClass that doesn't point to anything. The only way to create an instance of a class is by using new operator:
MyClass stackObj = new MyClass();
In a way, C# objects are a lot like objects that are created using new syntax in C++ - they are created on the heap but unlike C++ objects, they are managed by the runtime, so you don't have to worry about destructing them.
Since the objects are always on the heap the fact that object references (i.e. pointers) go out of scope becomes moot. There are more factors involved in determining if an object is to be collected than simply presence of references to the object.
C# Object references
Jon Skeet compared object references in Java to pieces of string that are attached to the balloon, which is the object. Same analogy applies to C# object references. They simply point to a location of the heap that contains the object. Thus, setting it to null has no immediate effect on the object lifetime, the balloon continues to exist, until the GC "pops" it.
Continuing down the balloon analogy, it would seem logical that once the balloon has no strings attached to it, it can be destroyed. In fact this is exactly how reference counted objects work in non-managed languages. Except this approach doesn't work for circular references very well. Imagine two balloons that are attached together by a string but neither balloon has a string to anything else. Under simple ref counting rules, they both continue to exist, even though the whole balloon group is "orphaned".
.NET objects are a lot like helium balloons under a roof. When the roof opens (GC runs) - the unused balloons float away, even though there might be groups of balloons that are tethered together.
.NET GC uses a combination of generational GC and mark and sweep. Generational approach involves the runtime favouring to inspect objects that have been allocated most recently, as they are more likely to be unused and mark and sweep involves runtime going through the whole object graph and working out if there are object groups that are unused. This adequately deals with circular dependency problem.
Also, .NET GC runs on another thread(so called finalizer thread) as it has quite a bit to do and doing that on the main thread would interrupt your program.

As others have said you definitely want to call Dispose if the class implements IDisposable. I take a fairly rigid position on this. Some might claim that calling Dispose on DataSet, for example, is pointless because they disassembled it and saw that it did not do anything meaningful. But, I think there are fallacies abound in that argument.
Read this for an interesting debate by respected individuals on the subject. Then read my reasoning here why I think Jeffery Richter is in the wrong camp.
Now, on to whether or not you should set a reference to null. The answer is no. Let me illustrate my point with the following code.
public static void Main()
{
Object a = new Object();
Console.WriteLine("object created");
DoSomething(a);
Console.WriteLine("object used");
a = null;
Console.WriteLine("reference set to null");
}
So when do you think the object referenced by a is eligible for collection? If you said after the call to a = null then you are wrong. If you said after the Main method completes then you are also wrong. The correct answer is that it is eligible for collection sometime during the call to DoSomething. That is right. It is eligible before the reference is set to null and perhaps even before the call to DoSomething completes. That is because the JIT compiler can recognize when object references are no longer dereferenced even if they are still rooted.

You never need to set objects to null in C#. The compiler and runtime will take care of figuring out when they are no longer in scope.
Yes, you should dispose of objects that implement IDisposable.

If the object implements IDisposable, then yes, you should dispose it. The object could be hanging on to native resources (file handles, OS objects) that might not be freed immediately otherwise. This can lead to resource starvation, file-locking issues, and other subtle bugs that could otherwise be avoided.
See also Implementing a Dispose Method on MSDN.

I agree with the common answer here that yes you should dispose and no you generally shouldn't set the variable to null... but I wanted to point out that dispose is NOT primarily about memory management. Yes, it can help (and sometimes does) with memory management, but it's primary purpose is to give you deterministic releasing of scarce resources.
For example, if you open a hardware port (serial for example), a TCP/IP socket, a file (in exclusive access mode) or even a database connection you have now prevented any other code from using those items until they are released. Dispose generally releases these items (along with GDI and other "os" handles etc. which there are 1000's of available, but are still limited overall). If you don't call dipose on the owner object and explicitly release these resources, then try to open the same resource again in the future (or another program does) that open attempt will fail because your undisposed, uncollected object still has the item open. Of course, when the GC collects the item (if the Dispose pattern has been implemented correctly) the resource will get released... but you don't know when that will be, so you don't know when it's safe to re-open that resource. This is the primary issue Dispose works around. Of course, releasing these handles often releases memory too, and never releasing them may never release that memory... hence all the talk about memory leaks, or delays in memory clean up.
I have seen real world examples of this causing problems. For instance, I have seen ASP.Net web applications that eventually fail to connect to the database (albeit for short periods of time, or until the web server process is restarted) because the sql server 'connection pool is full'... i.e, so many connections have been created and not explicitly released in so short a period of time that no new connections can be created and many of the connections in the pool, although not active, are still referenced by undiposed and uncollected objects and so can't be reused. Correctly disposing the database connections where necessary ensures this problem doesn't happen (at least not unless you have very high concurrent access).

If they implement the IDisposable interface then you should dispose them. The garbage collector will take care of the rest.
EDIT: best is to use the using command when working with disposable items:
using(var con = new SqlConnection("..")){ ...

Always call dispose. It is not worth the risk. Big managed enterprise applications should be treated with respect. No assumptions can be made or else it will come back to bite you.
Don't listen to leppie.
A lot of objects don't actually implement IDisposable, so you don't have to worry about them. If they genuinely go out of scope they will be freed automatically. Also I have never come across the situation where I have had to set something to null.
One thing that can happen is that a lot of objects can be held open. This can greatly increase the memory usage of your application. Sometimes it is hard to work out whether this is actually a memory leak, or whether your application is just doing a lot of stuff.
Memory profile tools can help with things like that, but it can be tricky.
In addition always unsubscribe from events that are not needed. Also be careful with WPF binding and controls. Not a usual situation, but I came across a situation where I had a WPF control that was being bound to an underlying object. The underlying object was large and took up a large amount of memory. The WPF control was being replaced with a new instance, and the old one was still hanging around for some reason. This caused a large memory leak.
In hindsite the code was poorly written, but the point is that you want to make sure that things that are not used go out of scope. That one took a long time to find with a memory profiler as it is hard to know what stuff in memory is valid, and what shouldn't be there.

When an object implements IDisposable you should call Dispose (or Close, in some cases, that will call Dispose for you).
You normally do not have to set objects to null, because the GC will know that an object will not be used anymore.
There is one exception when I set objects to null. When I retrieve a lot of objects (from the database) that I need to work on, and store them in a collection (or array). When the "work" is done, I set the object to null, because the GC does not know I'm finished working with it.
Example:
using (var db = GetDatabase()) {
// Retrieves array of keys
var keys = db.GetRecords(mySelection);
for(int i = 0; i < keys.Length; i++) {
var record = db.GetRecord(keys[i]);
record.DoWork();
keys[i] = null; // GC can dispose of key now
// The record had gone out of scope automatically,
// and does not need any special treatment
}
} // end using => db.Dispose is called

Normally, there's no need to set fields to null. I'd always recommend disposing unmanaged resources however.
From experience I'd also advise you to do the following:
Unsubscribe from events if you no longer need them.
Set any field holding a delegate or an expression to null if it's no longer needed.
I've come across some very hard to find issues that were the direct result of not following the advice above.
A good place to do this is in Dispose(), but sooner is usually better.
In general, if a reference exists to an object the garbage collector (GC) may take a couple of generations longer to figure out that an object is no longer in use. All the while the object remains in memory.
That may not be a problem until you find that your app is using a lot more memory than you'd expect. When that happens, hook up a memory profiler to see what objects are not being cleaned up. Setting fields referencing other objects to null and clearing collections on disposal can really help the GC figure out what objects it can remove from memory. The GC will reclaim the used memory faster making your app a lot less memory hungry and faster.

I have to answer, too.
The JIT generates tables together with the code from it's static analysis of variable usage.
Those table entries are the "GC-Roots" in the current stack frame. As the instruction pointer advances, those table entries become invalid and so ready for garbage collection.
Therefore: If it is a scoped variable, you don't need to set it to null - the GC will collect the object.
If it is a member or a static variable, you have to set it to null

A little late to the party, but there is one scenario that I don't think has been mentioned here - if class A implements IDisposable, and exposes public properties that are also IDisposable objects, then I think it's good practice for class A not only to dispose of the disposable objects that it has created in its Dispose method, but also to set them to null. The reason for this is that disposing an object and letting it get GCed (because there are no more references to it) are by no means the same thing, although it is pretty definitely a bug if it happens. If a client of Class A does dispose its object of type ClassA, the object still exists. If the client then tries to access one of these public properties (which have also now been disposed) the results can be quite unexpected. If they have been nulled as well as disposed, there will be a null reference exception immediately, which will make the problem easier to diagnose.

C#: Is there an Advantage to Disposing Resources in Reverse Order of their Allocation?

Many years ago, I was admonished to, whenever possible, release resources in reverse order to how they were allocated. That is:
block1 = malloc( ... );
block2 = malloc( ... );
... do stuff ...
free( block2 );
free( block1 );
I imagine on a 640K MS-DOS machine, this could minimize heap fragmentation. Is there any practical advantage to doing this in a C# /.NET application, or is this a habit that has outlived its relevance?

If your resources are created well, this shouldn't matter (much).
However, many poorly created libraries don't do proper checking. Disposing of resources in reverse of their allocation typically means that you're disposing of resource dependent on other resources first - which can prevent poorly written libraries from causing problems. (You never dispose of a resource, then use one that's depending on the first's existence in this case.)
It also is good practice, since you're not going to accidentally dispose a resource required by some other object too early.
Here's an example: look at a database operation. You don't want to close/dispose your connection before closing/disposing your command (which uses the connection).

Don't bother. The GarbageCollector reserves the right to defragment and move objects on the heap, so there's no telling what order things are in.
In addition, if you're disposing A and B and A references B it shouldn't matter if A disposes B when you dispose A, since the Dispose method should be callable more than once without an exception being thrown.

If you are referring to the time the destructor on the objects gets called, then that's up the garbage collector, the programming can have very little influence over that, and it is explicity non-deterministic according to the language definition.
If you are referring to calling IDisposable.Dispose(), then that depends on the behavior of the objects that implement the IDisposable interface.
In general, the order doesn't matter for most Framework objects, except to the extent that it matters to the calling code. But if object A maintains a dependency on object B, and object B is disposed, then it could very well be important not to do certain things with object A.
In most cases, Dispose() is not called directly, but rather it is called implicitly as part of a using or foreach statement, in which case the reverse-order pattern will naturally emerge, according to the statement embedding.
using(Foo foo = new Foo())
using(FooDoodler fooDoodler = new FooDoodler(foo))
{
// do stuff
// ...
// fooDoodler automatically gets disposed before foo at the end of the using statement.
}

Nested 'usings' shows you the 'outlived' is not really on, and rarely is (not to go and say never after 40 years of evidence).. And that includes the stack-based VM that runs on say CMOS.
[ Despite some attempts by MSDN.com and Duffius to make it vanish, you know manage it all for you the difference between the heap and stack. What a smart idea.. in space ]

"The runtime doesn't make any guarantees as to the order in which Finalize methods are called. For example, let's say there is an object that contains a pointer to an inner object. The garbage collector has detected that both objects are garbage. Furthermore, say that the inner object's Finalize method gets called first. Now, the outer object's Finalize method is allowed to access the inner object and call methods on it, but the inner object has been finalized and the results may be unpredictable. For this reason, it is strongly recommended that Finalize methods not access any inner, member objects."
http://msdn.microsoft.com/en-us/magazine/bb985010.aspx
So you can worry about your LIFO dispose semantics as much as you like, but if you leak one, the Dispose()'s are going to be called in whatever order the CLR fancies.
(This is more or less what Will said, above)