I Was Searching for some Local Database support for Windows Phone 7 in Google and Ended up with the list here .
db4o is an object based database that can be used in the silverlight applications / Windows Phone Application .It
offers you a lightweight persistence engine that stays close to your .NET objects and is a 100% .NET native code .
The db4o site also states that
“Using db4o in your Windows Phone apps is FREE!”
db4o can be used for free in any application that’s deployed on a Windows Phone device and available on the Windows Marketplace and this does not include the db4o instances running on the server side
Here are some nice posts on how to use Siaqodb.
Website : http://siaqodb.com/