Hope you read my previous post on Windows Phone 7.1 (Mango) local database support. If you didn't read the earlier post, you need to read it before reading this one. You can find it here: "Create DataContext". That will give you the basic context about the same.
In this post (I will rather calling it as a Tip), we will configure the project by adding the generated DataContext class and in the next post, we will learn what are the various CRUD operations we can do with a sample application. That will give you complete visibility to this new feature implementation.