In this post Gill Cleeren is looking at local file access in Silverlight 4.
Silverlight 4 ads more or less real local data access. By more or less, I mean that Silverlight applications can only access some folders. More particularly, we can access the My Documents, My Pictures, My Videos and My Music folders (on Mac, an equivalent exists). Within this directory, we can read, create and delete files. One important side-note though: the application needs to be a trusted application, meaning that it needs to run with elevated permissions.