As far as I know WatiN is a web application test framework, but your question seems to indicate that you are using WatiN to automate tasks in your application. In that context I will try to answer your question.
A Silverlight application is executed in a sandboxed environment and is unable to start new processes on the local computer. However, a Silverlight application can interact with the browser object model that is used to host the Silverlight application. This allows for some interaction with the local environment. If you can fit your use of WatiN into this model you are able to do it from Silverlight but in general you should consider a Silverlight application to live in a sandboxed environment.