Here is the task-related part of the VS2010 project (Windows Phone) structure:
The path supplied Application.GetResourceStream
isn't relative to the position of the class, but relative to the application package.
StreamResourceInfo albumArtPlaceholder =
Application.GetResourceStream(
new Uri("Images/artwork.placeholder.png", UriKind.Relative));
Would be the correct path. You can also try with a full pack URI. (see MSDN)
And finally, Resource
would be the correct Build Action
for this.