In my last blog post, I wrote about Silverlight 4 applications that run outside the browser with elevated permissions and their ability to leverage COM automation servers on the host PC. Another privilege that applications with elevated permissions-also known as “trusted apps”-enjoy is the ability to access parts of the local file system without prompting the user with an OpenFileDialog or SaveFileDialog. This feature opens the door to types of applications that simply weren’t possible with Silverlight 3.
File access is limited to certain locations on the hard disk: primarily the “My” folders such as My Documents, My Pictures, and My Music. But within those constraints, file system access works pretty much the same in Silverlight as it does in .NET. You generally begin by calling Environment.GetFolderPath to acquire a path to the folder you wish to access.
from Jeff Prosise’s Blog more here