At http://www.textglow.net/ they've proven that Silverlight 2 and its CLR is flexible enough to be able to take a .docx file (that's a modern Microsoft Word document) and browse it in Silverlight. I am assuming it's converting to XAML under the covers, and even if not I'm sure that a Canvas object and its contents are serializable to XAML (yes?).
What I want to know is, if a Word document can be browsed in Silverlight, why doesn't Microsoft take this another nineteen miles and convert XHTML+CSS to XAML and make Internet Explorer 9 or IE 10 a completely WPF based renderer?
I know that's not nearly as simple as it sounds; there is a vast amount of complexity in Trident.