Hi kean.. i was also having the same problem that you were facing. i had also posted questions on CodeProject earlier but had no success. Finally after doing a lot of "google" and books,what i found is that :
1. You cannot edit an Embedded Resource.
2. The XML file should not be kept as a resource as said by dmageiras. So what you can do is either
a)store it in some disk and access
or do it in my way :
b)make the Build Action of your XML to Content and then change the Copy
to Output Directory option to Copy Always.
with this the XML file will automatically go to the debug folder and
accessing XML will be much simpler:
to Load:
ie.
XmlDocument xmlDoc=new XmlDocument();
xmlDoc.Load("myXmlFile.Xml");
to Save:
xmlDoc.Save("myXmlFile.xml");
It is also recommended that if you want to edit any resource, it is better to keep it as Content File. After reading a number of books, the authors have warned that never keep your resource as Embedded Resource.
You can also have a look at this MSDN link :
http://msdn.microsoft.com/en-us/library/bbwz4bhx%28v=VS.80%29.aspx
Another link which will be very helpful! :
http://forums.silverlight.net/forums/p/152118/339496.aspx
I hope now you know what the correct way is!
make a simple project and try to do it. after you run your project for first time, you can check in the debug folder of your project where you can find your XML. make some changes through code on that XML and it gets reflected in that XML itself.
Good Luck! :)