Thanks so much for your help. I tried your approach to create the client code but that didn't work. And that's because the problem seems to be somewhere else.
So I installed fiddler to see the traffic.
Fiddler showed that the service was being accessed but the http response code was 302 showing that there was some redirection involved.
The address of my application is like this http:///Silverlightapp/(S(oirppxrwzhlf2a2vbia1ui45))/Default.aspx#/Home and it is hosted on IIS 6.
So I had to employ a workaround by installing the service on machine with IIS7 (and there was no session id involved like in the above url).I still kept the silverlight application hosted on IIS 6.
Anyway, in summary, to anyone who reads the thread, I did the following to troubleshoot and solve issue(temporarily)
Changed the end point address in the ServiceReferences.ClientConfig file. When you add the service using discover option in VS, the endpoint address is of the localhost and this must be changed.
Registered the service model using ServiceModelReg -i command. (this solved my problem that my applicaiton was only working from development server and not IIS)
-Put the CrossDomain and ClientAccessPolicy files in c:]inetpub\wwwroot folders.
-Used fiddler to look at http response codes. I had to do no configuration in fiddler.
Changed the binarymessageEncoding to textMessageEncoding iin the web.config file of the silverlight web project that also hosted the ecf service. I did this becasue adding a silverlight enabled wcf service creates a custom binding configuration in the web.config file by default uses binary encoding. I needed text encoding to see errors in fidder. But this didn't help much becasue I only saw the name of the operation in the Inspector>xml tab in fiddler. This was the same even after my issues was resolved by workaround.
Thanks for the help