I have a linkbutton which is added to a column in a datagrid
dynamically using a template I created. When I change the data in it
by not databinding and then when I later retreive the data from the
control after a post back it goes back to the value which was
dynamically bounded.

I have set up similar process with a checkbox template and it remebers
the value.

Are Linkbuttons not capable of this? and should I use something else?

Here is the code I used to change the values in the linkbutton:
        Dim lbtn As LinkButton = dgi.Cells(colNum).Controls(0)
                           lbtn.Text = "Hello"
                           lbtn.CommandArgument = 1001

When the page has been rendered it shows up as "Hello". But then on a
post back I try and retreieve the data

userInputValues(i) = CType(e.Item.Cells(i).Controls(0),
LinkButton).Text

It has the old value.

Here is the Itemplate code

Public Class TemplateEditLinkButton
   Implements ITemplate
   Private ColName As String
   Private SecondColName As String

   Private SecondColAsDisplay As Boolean

   Public Sub New(ByVal aColName As String, ByVal aSecondColName As
String, ByVal aSecondColAsDisplay As Boolean)
       ColName = aColName
       SecondColName = aSecondColName
       SecondColAsDisplay = aSecondColAsDisplay 'so the secoond col
will be the lbtn Text, and first column will be the text
   End Sub

   Public Sub InstantiateIn(ByVal container As Control) Implements
ITemplate.InstantiateIn
       Dim lbtn As LinkButton = New LinkButton
           AddHandler lbtn.DataBinding, AddressOf Me.BindLinkButton
       container.Controls.Add(lbtn)
   End Sub

   Sub BindLinkButton(ByVal s As Object, ByVal e As EventArgs)
       Dim lbtn As LinkButton = s
       Dim dgi As DataGridItem
       dgi = CType(lbtn.NamingContainer, DataGridItem)

       Dim textCol As String = ColName
       Dim argCol As String = SecondColName

       If SecondColAsDisplay Then 'switch it around
           textCol = SecondColName
           argCol = ColName
       End If

       If Not dgi.DataItem(textCol) Is DBNull.Value Then
           lbtn.Text = dgi.DataItem(textCol)
       Else
           lbtn.Text = "[Empty]"
       End If

       lbtn.CommandArgument = dgi.DataItem(argCol)

   End Sub

End Class