Google for “free audio tracks” to find individually recorded instrument notes for piano, flutes, violins, drums, etc.
Soundfont is a common format for sharing free audio files intended for use in probes . As a rule, the quality of everything that you find in the public domain will vary from unsuitable to reasonable with a few remarkable exceptions of high quality.
Most soundphones will not contain separate audio files for each note. Most often, soundfonts will contain one pattern for each octave. In this case, your application will need to be able to shift note notes to the correct frequency. (This is not difficult to do and is a normal approach for samplers .)
Synthesis (generating tones programmatically) - I don’t know what your application does, but ... sine tones are simple sounds and easy to create, but it will soon become boring to hear. More interesting sounds can be created, but the sound synthesis code gets complicated quickly. I would not recommend writing your own synthesis code if it is not the main part of your application. IMHO it would be much better to use sample playback or use MIDI (if Windows Phone 7 has a good MIDI playback library).
Soundfont Archive
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