I was using the timestamp trick on the Silverlight
I have the same issue when run as OOB from Visual Studio
Regarding running from IIS remotely, I noticed that I had to edit the caching policy I had added to web.config - keeping that would always show the update/download progress logo (but would download faster than when a new version was available, only partial download maybe, but annoying to see the download progress even for a while every time)
I had to remove (comment out) the part that was trying to cache .xap till changed