Validation can also happen while binding is made. This is very useful if the bound objects have built in logic. For example if you have a Product object which has Price property which must be some number bigger the zero you will probably have code similar to this one:

class Product
{
    private decimal _price;

    public decimal Price
    {
        get { return _price; }
        set
        {
            if (value <= 0)
                throw new Exception("Exception from Price setter");
            _price = value;
        }
} 

If you need to mark invalid input inside some TextBox you can then write something like this:

    <Window.Resources>
        <code:Product x:Key="dsProduct"/>
    </Window.Resources>
    <StackPanel>
        <WrapPanel>
            <TextBox Width="200" Text="{Binding 
                        Source={StaticResource dsProduct}, 
                        Path=Price, 
                        UpdateSourceTrigger=PropertyChanged,
                        ValidatesOnDataErrors=True, 
                        ValidatesOnExceptions=True}">
            </TextBox>
        </WrapPanel>
    </StackPanel>