In order to let the model work with the file a user has on his/her computer, you need to pass the file first to the server. You can build your own logic in Silverlight for that or use the new 10.1 Uploads functionality of the geoprocessing services.
My suggestion is to extend your current model to get first an Excel file from user, process it if required, and then use the processed dataset as input for your geocoding process. When you make the input Excel file a model parameter, you will be able to implement the uploads logic within your Silverlight application.
Just as a comment, you can take a look at the ArcGIS Viewer for Flex which has implemented the Uploads functionality as a widget or a sample Esri JavaScript application where one can upload a file to be input for a GP service.