By "online" sample I mean the one published by ESRI at the API for Silverlight resource center. It uses the Streetmap_2D service, which is in geographic coordinates. I was assuming knowledge of this in my original post. To verify the measurements, I brought the same service into ArcMap and projected it to UTM (WGS 84) for the area I was testing. In the sample, the MeasureAction's map units are set to DD, and the perimeter calculation is correct, so obviously the geodesic distance algorithm is used in that case. It is the area calculation that I am bringing into question.