I have been working on my WP7 app now for around 6 weeks. I’m not completely happy with it yet but I have good set of base functionality. For the first 4 weeks I couldn’t run my app in the emulator from the start screen or the app list. I had to start the app from Visual Studio. When I clicked the icon the screen would flash and return to the list/home screen. I assumed this was an issue with the emulator but when I got a developer device I had the same issue.
I consulted with the connect.microsoft news group and at first we thought it was an assembly signing issue but one by one I eliminated them all as the cause. Out of desperation I started a new project and slowly moved all my code to it and what do you know, it works.
I still have no idea what the problem was but at least its resolved. Please leave a comment if your also having this issue and this fixes it.