First of all, I don't actually have a better term for tradtional use of XAML compiled as part of an assembly (BAML format) other than to coin the term "firm" XAML in response to the now common term, "loose xaml" (.xamlx files). If you have a better term, come tell me, OK?
So the purpose of this post is to let you in on something that I didn't know people didn't understand already: There is nothing stopping you from using tranditionally created and compiled XAML files containing your WF4 based services hosted in AppFabric and exposed via traditional SVC files.
All in all this shouldn't be a very big deal for just about anyone but I just ran across a team that spent weeks carefully recreating (and re-debugging their code) WFs into XAMLX files so they could "use" AppFabric. Of course those of you that know me could imagine the look I gave them all.
So NO, there's nothing at all about WF 4 and AppFabric that require loose XAML files to be used. I was confused as to why and how they got this idea in their head to begin with until I stopped and thought about it for a minute. EVERY, and I do mean EVERY template, example solution, and video / blog I have ever seen out there on WF4 Services and/or AppFabric has involved XAMLX files. Visual Studio 2010 does not ship with an item template for "AppFabric Enabled Tranditional XAML Service". Nothing at all out there. So I can now see how people can get the wrong ideas.
If you are not a fan of loose XAML or have existing assets you want to host in now in AppFabric, rest assured that your investment is safe.