Got the client to uninstall and then re-install and still no luck.
Noticed other posts where the 64 bit IE8 was troublesome. The client is running the 32 bit version of IE8, and have SL4 installed. This is the same setup as a working Vista PC.
Other posts recommend a clean re-install of silverlight, where various steps are required to remove folders etc, but some users on that forum did that without success. In fact, one user switched to Firefox and it worked.
Noticed that silverlight 4 applications appear to work OK.
Any other suggestions would be useful. I will most likely ask the user to try Firefox as a last resort.
Did you ever find the solution? I'm having an outwardly similar problem. Our application can be viewed by a wide variety of users but one in particular can't view it when inside VPN & Fiewall. While inside the VPN he can view other SL apps.
So I doubt it's any of the common errors - starup object, namespace, a malformed xap. The manifest is ok.