Node.Position and Node.Location (which might be the same values, depending on the values of Node.LocationSpot and Node.LocationElementName) are both in model coordinates.
You can convert model coordinates to DiagramPanel coordinates by calling DiagramPanel.TransformModelToView.
You can call TransformToAncestor or TransformToVisual to convert the DiagramPanel coordinates to whatever element you like. Those two “Transform…” methods are on Visual in WPF or on UIElement in Silverlight, if I remember correctly. Wait – Silverlight doesn’t have TransformToAncestor.