Recently I did a webcast on the different steps that are required to prepare your SharePoint Development Server for hosting Silverlight 2 applications in the SharePoint sites. I also went through these steps yesterday during my session here. It is targetting beta 1 and beta 2 will be available later today so you might have to tweak the steps a bit. I'll try to get an update on that done in the next coming weeks.

The webcast is available on http://www.codeplex.com/SL4SP/Release/ProjectReleases.aspx?ReleaseId=14118.