I have a windows 8 app (Digital Nightstand) in the windows 8 appstore. The app stores user preferences in XML files on the user\'s machine, also known as local storage. What
The data does not get deleted. But if you release an update and If you have changed the version of the data storage, then you need to have a mechanism to copy the data from version 0 to version 1.
You can optionally version the application data for your app. This would enable you to create a future version of your app that changes the format of its application data without causing compatibility problems with the previous version of your app. The app checks the version of the application data in the data store, and if the version is less than the version the app expects, the app should update the application data to the new format and update the version. For more info, see the Application.Version property and the ApplicationData.SetVersionAsync method.
Application data sample http://code.msdn.microsoft.com/windowsapps/ApplicationData-sample-fb043eb2 includes code for version which should be helpful for you.
Versioning: Application data can utilize versioning of app data to upgrade from one data structure to another. The version number is different from the application version and can be set at will. Although not enforced, it is highly recommended to only use increasing version numbers, since an undesired situation, including data loss, could occur when transitioning to a lower data version number that represents newer data. Please note that application data only roams between apps with the same version number. For example, devices on version 2 will transition data between each other and devices on version 3 will do the same, but there is no automatic transition between version 2 and version 3 devices. This is the responsibility of the app at the time of version number update. Installing a new application that has previously been utilizing various version numbers on other devices will start out with the highest version number application data available
The answer is no!
Don't worry when user updates an app, the local and roaming folders/settings won't get wiped out.
No the data persists after update. I know it happens when you change your manifest file in visual studio but not when app is updated through market.