Hi Franco,
I tried your code in C#, and it still can't find the files. The result of Path.Combine is this:

@"Programm Files\SmartDeviceApplication1\myXml.xml"

File.Exists returns .F., because the absolute path on my computer is:

"C:\Documents and Settings\zam01\My Documents\Visual Studio Projects\SmartDeviceApplication1\SmartDeviceApplication1\myXml.xml"

I even tried to create a SmartDeviceApplication1 dir under Programm Files, and copied the .xml/.xsd files there, it makes no difference.
If my xml files were somewhere else, I'd accept the 7 miles long statement for the path, but to need that when your files are in the root directory of the app seems ridiculous (let alone it does not work.) It is truly amazing that you need so much research to do such a simple thing.
Where are all the people trumpeting the triumphant arrival of .NET?
Thanks - I hope you'll manage to make this work, and will share the secret with me...