Silverlight applications are downloaded by the browser in XAP files.
These XAP files are essentially files that contain an assembly manifest file and one or more assemblies.
I work on a team building Silverlight apps (version 4). We are having very frustrating issues when updating our code. Each of us on the team are experiencing this issue.
Before running a Silverlight application, you will not find a XAP file in the client bin folder.
Usually the following steps are followed while running a Silverlight application. It contains many files needed to run Silverlight application at the client browser. If you open App file, you will see that the preceding information is provided there.
Flash has similar issues and there are a couple workarounds.
Here's an article that details the issue and possible solutions.