Free Tools available:

IIS Express free download

Visual Studio 2010 express free download (there might be a licensing issue here)

or Visual Web developer express 2010

SQL Server 2008  Express R2 free download (2010 version is available in RC0 version)

Making sure that IIS Express is installed you can develop against it

So you create your web site and client in Visual Studio and your Silverlight client also. You need to specify that the SL client will run out of the browser. In the solution property settings for your Web project you set the Web site to be hosted on the IIS express server.

In your Silverlight Project properties you specify that your application can run out of the browser. NOTE also the Port number is a 56528. This is because we are accessing the local file system in this application (hence OOB SL).

This gives the Silverlight client ability to request permission to install itself out of the browser it elevated thrust and allows it to access the personal folders (only!!) of the host machine. Our application needed access to these in order to pass them to an FTP hosted WCF service.

So you Compile and execute. It loads in the browser. Right click

This allows you to install on the desktop.

Once have installed the application OOB you need to set up a batch file to start up the IIS express service followed by the web site that hosts the Silverlight client. You’ll need to examine the shortcut created by the OOB action and paste result in the second line of the batch file

start /d "C:\Program Files (x86)\IIS Express" iisexpress.exe /site:LocusCRM.Web
start /wait /d "C:\Program Files (x86)\Microsoft Silverlight\sllauncher.exe" 3991240927.localhost

Now to run the OOB Silverlight you just need to click on the batch file icon.