The Windows Phone 8 SDK includes the Windows Storage API which can be used in the Windows Phone 8 app to store and retrieve data from the Storage. The Windows Phone 7 SDK already provided the IsolatedStorage APIs.
Which one to use? IsolatedStorage File or Windows Storage API.
The answer is simple. If you are targeting the Windows Phone 8 mainly, then the better option is to use Windows Storage API as per the MSDN. If you are targeting the same code base for both your Windows Phone 7 and Windows Phone 8 app, then one can try the WP7’s IsolatedStorage API.