Originally, it was envisioned that professional designers would work in Expression Blend, and developers would work in Visual Studio, making changes to a single shared set of source files. While it is certainly possible to do that (so long as you are careful to check regularly that you haven't broken something expected by the other dev. or design tool), many members of the developer community, including some inside Microsoft, have discovered benefits in keeping Blend and Visual Studio project activity SEPARATE -- even to the point of manually cutting and pasting carefully-refactored versions of Blend-generated Xaml into the "official" VStudio project source, rather than allowing designers and developers operate directly on a single shared code base. Microsoft's User Experience Team in the UK published a video describing the problems they ran into trying to coordinate designer and developer efforts on actual projects.
Real_World_WPF_DesignersAndDevelopersWorkingTogether
One of the main lessons learned is that you can't staff a project with designers and developers who are completely ignorant of each other's domains. Developers need to be familiar enough with Blend that they can provide designers with useful UI shells for the designer to decorate, and useful data "stubs" the designer can design interactivity against, and the designer needs to have enough understanding of development issues that they don't do things like delete controls and replace them with custom visual elements - not realizing that they broke all the functionality tied to the original control.
