Hi Steve,
Yes you can simplify to the step before clicking "tick" button as it will launch the Personas pop up ("Allow to save file"). So yes, you can possibly simplify till there.
As you mentioned, yes there are some security restrictions imposed on silverlight to access the local file system. BUT, we are currently working on a solution to increase the trust level so that in future (i don't know when currently and if accepted 
), you will not see those pop ups and behavior will match that of webgui file upload/download.
Regards,
Sushant