ERROR
“An unhandled exception occurred in the Silverlight Application in SharePoint 2010”
Occurs when using the Silverlight creation tool.
Solution
1. Central Administration > Manage Web Applications
2. Highlight the offending application > Click on General Settings in the ribbon
3. Web Page Security Validation > Set to “On”
4. Click “OK”
Resolution
You should now have no issue creating libraries/lists/sites.