I attended the MS event “Rich Internet Applications with Visual Studio 2008 Service Pack 1” presented by Mike Taulty , I was quite impressed with new features of Silverlight 2 and WPF. My understanding was that WPF could only be used in windows desktop applications, but it turns out that it can be compiled to be run as a application running of a web server. However the big draw back in my view was the requirment of windows XP (SP 2) / Vista and presence of .net framework on the client machine, I can understand why the dependency was but from a pratical point of view I find it very limited. Only big enterprises with MS intrastrucure will be inclined to develop using WPF as a web based solution.
.NET Framework Client Profile is a cut down version of .net framework, created to support web based and windows deployment, but still being 28 MB in size is quite a lot, and I do not see people waiting for a 28 MB install before they can view a web page unless they are forced to do it in an intranet environement.
Over all I found the features impressive and using XAML at the backend means they are interoperable as well, which is great.
Looking forward to getting my head into silverlight 2.