In DevForce Silverlight, all fetches that retrieve data from the back end (via the EntityService) must be done asynchronously. So, here _manager.Notes.ToList() is really a synchronous call to the EntityManager cache, and returns no data because nothing is available in cache. You will need to use an asynchronous fetch, something like _manager.ExecuteQueryAsync<Notes>() to retrieve these entities from the back end. You'll also need to use a "logged in" EntityManager, which means that a LoginAsync() call must be done first.
The need for asynchronous service calls makes unit testing within Silverlight quite tricky, so it's probably better to first determine whether you need to unit test the service calls or can mock that part. If unit testing the service is not necessary, it's easiest to load a saved EntityCacheState into an EntityManager and then perform the usual synchronous fetches.
When unit testing the service calls is necessary, you also need to mark test methods as [Asynchronous] and use the Enqueue* calls provided by the unit test framework.