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Microsoft Silverlight 3 is shaping up to be a very impressive release. While Silverlight 1.0 was a relatively narrow-purpose release, relevant mostly to streaming content delivery on the web, Silverlight 2.0 delivered a workable general purpose, cross-platform programming environment that leveraged the growing skills of .NET/WPF developers. But Silverlight 2.0 lacked many features and controls that WPF developers depended on, and it violated the WPF subset principle that Microsoft had set for itself to ensure that Silverlight applications could cross-compile with WPF. Silverlight 3 sets out to remedy many of these issues, while offering an even more compelling developer platform for forward-thinking appplications.

Silverlight has always had a significant streaming media focus. The focus gets stronger in Silverlight 3. Beyond the above, Silverlight 3 now lets developers develop their own custom media codecs.

IIS gets beefed up to feed all of those Silverlight 3 client with streaming media. Akamai to offer hosted options for IIS Media Services. IIS Media Services is freely available.

Perspective 3D and pixel shader effects allow developers to warp and deform UI elements at will, all while continuing to feed through UI events to the proper controls.  

Silverlight 3 will have deep support for linking URLs to specific application states and back/forward navigation. ClearText arrives in Silverlight 3 as well, on all Silverlight-supported platforms. For folks who have been trying to using Prism and other means to download assemblies on-demand in order to reduce application startup time, Silverlight 3 now supports this outright.

A new Silverlight 3 feature that should make many Silverlight developers ecstatic is merged resource dictionaries. 

Even with all of the new features in Silverlight 3, the team managed to make the installer smaller and faster than Silverlight 2.