Upload File and Save to Database

To fix the compile error, remove the while statement. You're trying to create a new FileData() which can never be used until b > -1.

I don't know that the code will work after that, but it will fix this one compile error.

private void UploadFile()
{
    DatabaseData.DataClassesDataContext context = new DatabaseData.DataClassesDataContext();
    {
        OpenFileDialog dlgOpen = new OpenFileDialog();
        dlgOpen.Title = "Select file";

        if (dlgOpen.ShowDialog() ?? false)
        {
            FileStream inStream = File.OpenRead(dlgOpen.FileName);

            FileData fd = new FileData();
            fd.FileId = Guid.NewGuid();
            fd.DataFile = inStream;
            fd.Title = dlgOpen.FileName;
            fd.FileExtension = txtExtension.text;

            context.FileDatas.InsertOnSubmit(fd);
            context.SubmitChanges();

            inStream.Close();
        }
    }
}

File operations in C# (my blog link will help you)

Well, you read my disclaimer in your comments. I can't guarantee any pros here would agree with the approach it's per your request. I am just learning C# the right way and got the idea to convert a working non-database program. I needed this to convert all my existing data into a new database that was to take over storage:

/* Spawned from a button click
...
*/
        //
        // Here I bring in the directory which you'll likely replace with
        // a single file
        //
        string[] files = 
            Directory.GetFiles( 
            @"yourDicectory");

            // 
            // At this point you may disregard my loop if needed
            //
            foreach (string file in files)
            {
                //
                // Here the entire files are read and split
                // Handle your data how you like
                //  
                StreamReader fileReader = new StreamReader( file );
                string lines = fileReader.ReadToEnd();
                string[] entries = lines.Split( ',' );

                // 
                // Here, omitted, I declare variables of types to insert "holders" 
                // Every CSV has to go to a corresponding holder of the 
                // the appropriate type (i.e., DateTime, decimal(money), or yourType)
                //

                SqlCeConnection con = new SqlCeConnection( "Data Source = YourDataSource.sdf" );
                con.Open();
                SqlCeCommand cmd  = con.CreateCommand();

                //
                // The insert command that takes the parsed values - value1, value2, ...
                // which are the named and omitted declarations from above
                // You're providing a signature of the table you're inserting into
                // 
                cmd.CommandText = "INSERT INTO YourTable ([Column1], [Column2], [Column3], ... , [Column(n)]) VALUES (value1, value2, value3, ... , value(n))";

                //
                // Here, omitted, I parse and convert the values and store them in the holders
                //

                // Now execute and catch if needed
                    try
                    {
                        cmd.ExecuteNonQuery();
                    }
                    catch( SqlCeException sqle )
                    {
                        myTextbox.Text += sqle.Errors.ToString() + "\n";
                    }
                }
                //
                // Update my view - May not apply
                //
                myGridView1.Update();
                con.Close();
            }
/* Do whatever else you'd like ... */