I am looking for the best practice for storing user credentials in a windows 7 phone app. I am writing an app for a web service that requires authentication. Thankfully it is only basic authentication at this point. What is the best way to store those credentials?
The best way to store credentials in your case would be encrypting them and storing in the application-specific isolated storage - basically, it cannot be accessed by any other application, so that gives another protection layer.
A good explanation by Rob Tiffany of how to encrypt your data in isolated storage can be found here:
Don’t forget to Encrypt your Windows Phone 7 Data
I haven't tried out the code myself, so can't vouch for it's correctness (sorry Rob :-) - should serve as a good starting point though, I would imagine.
I also second Dennis' point about application-specific isolated storage giving you an additional/basic layer of protection in addition to encryption, as theoretically at least, other applications cannot access your applications isolated store.