Thanks to Simon Middlemiss, you need a new ClientAccessPolicy.xml file with Silverlight 2 Beta 2 if you are going to access web services. Also your URL MUST not contain underscores (eg MyApp_Web was the default for Beta 1). Just rename your website in your project file.

<?xml version="1.0" encoding="utf-8"?>
<access-policy>
    <cross-domain-access>
        <policy>
            <allow-from http-request-headers="*">
                <domain uri="*"/>
            </allow-from>
            <grant-to>
                <resource path="/" include-subpaths="true"/>
            </grant-to>
        </policy>
    </cross-domain-access>
</access-policy>

Cheers,
Paul