Microsoft has been cagey about taking Silverlight "offline" to create cross-platform, desktop-installable RIA-style apps to compete with Adobe AIR. But if you are interested in building an offline or occasionally-connected app with Silverlight, it's not too hard to do.
If you're targeting Windows, then it's tennis-without-a-net:
- you can create an "HTML Application" (HTA) and embed Silverlight
- or you can create a Windows Forms app and embed Silverlight 1.0 in it as an ActiveX (this might be possible with Silverlight 2 as well)
- or you can create a Windows Forms app that hosts the WebBrowser control, and load your Silverlight 2 app in there
Playing around with that last scenario, it was easy to get full communication between the Win Forms app (which has privileges based on the user who's running it), the DOM doc inside the browser control, and the Silverlight control inside the document. On Windows, that pattern allows a lot of options.
But what if you want a cross-platform app that works the same on Windows, Mac (and Linux, if the Moonlight initiative pans out)?
Take a look at Mozilla Prism: Prism gets you the basic desktop integration for running your app. Now you just grab your Silverlight files and make that the "web site" you're going to bundle via Prism.
Out of the box, Silverlight gets you offline isolated storage in the file system. Prism's separate Mozilla profile should keep the offline storage space separate from the user's general browser cache.
And with LINQ over objects and LINQ to XML, that may be enough for your data management needs. Silverlight doesn't come with a relational API or database like AIR does, though I expect someone will cook one up -- or write an adapter to SQL Server Express (if the odd restriction on Socket destination port numbers is relaxed.) And of course Silverlight doesn't have the native PDF support that AIR does (although XPS support will presumably show up at some point).
Before any of this can happen, all the related software has to get closer to production. Silverlight (2b1) has to stop crashing Firefox (3b4) when it terminates, and that combo also needs to get better at handling things like the SHIFT key.