Gone in a Flash
Silverlight has only ever had, at best, 65% penetration on the desktop and minimal mobile presence, meaning that developers using it were writing for a smaller audience, compared with Flash and Java. So, it is not much of a surprise to find that Silverlight's fifth release happened with more of a nudge out the door than an explosive presentation like the early versions.
However, if Windows Phones take off, then there is still a future for Silverlight, along with Expression and Visual Studio, to create applications for that growing user base. The new version offers plenty of features for both desktop web use and mobile app development.
New features in Silverlight 5 include hardware GPU decoding of H.264 media, plus an improved graphics stack with 3D support in Windows with GPU access to draw vertex shaders and low-level 3D primitives, for gaming-class graphics within the browser. It also adds the a secure "trusted app" model to the browser.
Those features help keep it on a vague par with HTML 5, which Microsoft is happily supporting in its new browsers, but the lack the shouting "look-at-me" news and Microsoft's silence about its plans beyond this version suggest that Silverlight has a limited future.