Look at using a buffer to load it in in smaller batches. Have a look at the following tutorial:
http://zombiebob.blogspot.com/2010/08/large-file-upload-in-silverlight.html[
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Hope this helps.
Update: Ok, so you have a varbinary(max) field in your DB. Create a function that appends data to that field, as your service receives data, append that data to the field! Remember that Silverlight is asynchronous so make sure you are sending your data in the right order otherwise it will break!