Deploying and debugging your Windows Phone 7 applications on a device requires Zune client software to be running. However, Zune client software blocks access to your local media database making it impossible to debug anything using media APIs. This may include photo choosers and launchers, XNA and Silverlight playback of media elements.

The solution is simple, with the newly released Windows Phone Developer Tools October 2010 Update, a new tool WPConnect is provided to circumvent this issue. Download and install the tools update. Once done you can connect your device, close Zune software and launch WPConnect.exe from the installation directory. Normally this is “%ProgramFiles%\Microsoft SDKs\Windows Phone\v7.0\Tools\WPConnect”.
More details on MSDN: http://msdn.microsoft.com/en-us/library/gg180729(v=VS.92).aspx

Note: this applies to developers using an unlocked Windows Phone device. Unlocking your phone requires registration in the AppHub.

 

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