It looks like MXD needs to be converted into MPK first before it can be added as a local layer. Not sure what GP function that could be called to do that conversion and at the same time the function is supported in ArcGIS Runtime.
Hi David:
You can either create the MPK from the MXD in ArcMap, or you can run some ArcPy scripting to create the MPK from an MXD.
http://resources.arcgis.com/en/help/main/10.1/#/Package_Map/0017000000q5000000/.
Haven't tried creating a peoprocessing package from a script that calls this function from a Runtime App, but it might work.
I hope this helps!