Silverlight is very powerful. It is a relatively new technology, so it is not as advanced in some aspects as its rival Flash. Microsoft is rapidly adding new features to make it comparable to Flash. In my opinion, Silverlight is much better than Flash now. I have developed a few flash applications using Adobe Flex. I have also worked on an Adobe AIR application. Adobe has done some pretty cool things to make Flash development easier, but the main drawback is that I have to become familiar with ActionScript.
With Silverlight, I can keep developing in C#! (I also think XAML is more powerful than MXML)
Check out the link above to see an example of what can be done with the current Silverlight bits.