SQL Data Services is Cool...but It Won't Work in Silverlight 2
If you are thinking about using SQL Data Services (the data part of the Azure stack) in your Silverlight 2 project, think again. As you might know, ADO.NET Data Services (Astoria) will not work cross-domain regardless of a security policy file (because of some limitations in the two networking stacks that Silverlight 2 uses). Its a problem but in most use-cases ADO.NET Data Services (Astoria) is used on the same domain so no biggie...but...
The Azure SQL Data Service uses Astoria to expose their data to the client...that means that with the ADO.NET Client Library that you can't access SQL Data Services. The reality is that since SQL Data Services requires basic authentication, it would not be terribly secure to call it in any case but this seals the deal.
The only good news is that since Astoria is just REST, you might be able to do the work to call it manually using WebClient or HttpWebRequest but its not an easy fix.
Too bad too, it would have been a great mix...SL2 + SDS.