Well, actually you can do local image processing in Silverlight 2 ... But there are no built-in classes for you. But you can load any image into an array of bytes and start manipulating it or implement your own image encoder.
Joe Stegman got a lot of great information about “editable images” in Silverlight at http://blogs.msdn.com/jstegman/ . He does things like applying filters to images, creating mandlebots, and more.
This blog discusses the Silverilght JPEG encoder (FJCore), which you can use to resize and recompress photos: http://fluxcapacity.net/2008/07/14/fjcore-to-the-rescue/
Another tool is Fluxify, which allows you to resize and upload photos using Silverilght 2. Can be found at http://fluxtools.net/ p>
So yes, client-side image processing can be done in Silverilght 2. Happy hack!
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