To go along with the release of Visual Studio 2008, 
Microsoft has also released the Release Candidate (RC) 1 of Silverlight 1.0 and a refresh for Silverlight 1.1. You can get more information about the releases on Tim Sneath's blog.
If you install both Silverlight 1.1 and Visual Studio 2008, be sure to check out the Microsoft Silverlight Alpha Tools for Visual Studio 2008 Beta, which is an add-on for Visual Studio to provide a Silverlight project system for developing Silverlight applications in C# or Visual Basic.
This includes:
Visual Basic and C# Project templates Intellisense and code generators for XAML Debugging of Silverlight applications Web reference support Integration with Expression Blend Also be sure to download the latest update to the ASP.NET Futures (July 2007) release. This release is compatible with both Visual Studio 2005 and Visual Studio 2008 and contains ASP.NET-based Silverlight controls.