I have seen on many sites the silverlight video player. I noticed that all of them took a URL as the source of the video file.

Can a silverlight player play a video file kept locally?

I mean a simple HTML file kept in a folder with the xap (say VideoPlayer.xap) and the video (say ABC.avi) file.

The html file would contain an object tag. For example:

<object height="240" width="500" type="application/x-silverlight-2" data="data:application/x-silverlight,">
            <param value="VideoPlayer.xap" name="source">
            <param value="onSilverlightError" name="onerror">
            <param value="white" name="background">
            <param value="cc=true,markers=true,markerpath=markers_movie21.xml,m=ABC.avi" name="initParams">
            <a style="text-decoration: none;" href="http://go.microsoft.com/fwlink/?LinkID=115261">
                <img style="border-style: none;" alt="Get Microsoft Silverlight" src="http://go.microsoft.com/fwlink/?LinkId=108181">
            </a>
        </object>