In this post, Mike Ormond explains about
XNA from
Silverlight on
WP7 and how to deal with the fact that the emulator doesn't have pictures stored.
Source: Mike Ormond's Blog
One of the things you might notice about the emulator – especially if you’re doing anything with imagery, is the lack of any pictures in your library. This can be a problem, particularly if you want to do any testing with the PhotoChooserTask but fear not, there is a way around it and yes, it uses XNA.
The idea is to check when your application starts whether it’s running in the emulator, and if it is, add some pictures so you have something to work with. You can do this using the Microsoft.Xna.Framework.Media.MediaLibrary class. This class has a SavePicture() method that allows you to save a JPEG image to the media library on the device.