The Popup for Windows Phone Quick Start demonstrates how to create a C1Popup inline in the XAML for conciseness; while certainly acceptable; this is generally not typical. You can create a Popup in XAML (for example, you might define the visual appearance of the Popup as a resource in a XAML ResourceDictionary). More likely you'll create a popup as part of a UserControl's logic. You'd create the popup's content in a separate user control and use an instance of that control as the content of the popup.
For an example, see the Creating a Popup in a UserControl topic.