Joseph Hill, our new Mono PM here at Novell, just noted to me that Inkscape is adding XAML support.
A quick google search found Jon Galloway's nice summary of why this is exciting.
I'd also like to add that while Inkscape might not support all of the Silverlight XAML, it's still an excellent tool for artists used to using it to create Silverlight websites.
Hopefully at some point in the future, we will have time to continue work on LunarEclipse to make it a more full-featured and viable option for creating Silverlight content, but for the time being, it's nice to know that users have other Free Software options.