I have been developing a Silverlight application to get data from a pre-existing WCF Service. The code for the service was already in production and was available in its own Visual Studio solution. In order to debug my Silverlight application, which was running from within a different solution, I needed to add a crossdomain.xml file to the root of the folder where the service was running from. This is necessary even though both solutions were using the ASP.Net Development Server (localhost) on different ports. A full explaination is available on MSDN for Making a Service Available Across Domain Boundaries. Tim Heuer also has a very good explaination of the problem and solution here.