You could use Silverlight 3 Out of Browser application - I guess that you should be easily able to resolve most of the networking problems, related to the network outages:
Regarding SQL Lite database support. As you might already know, we provide a product, called OpenAccess, that supports six databases:
QSL Lite is not one of them, but there are other free solutions, such as MySql for example, that you could choose from.
On the other hand, there are plenty of providers for the MS Entity Framework ORM, you could search the Internet for a provider for SQL Lite. Since most of the MS web service Frameworks (ADO.NET Data Services, RIA Services) are based on EF, this could be a nice option too.
the Telerik team