> I believe MS's own site are done in Silverlight more and more, so that's one reason
Silverlight's a fair amount easier to develop in than the alternatives since you can use your favorite .NET compatible language (C#, Visual Basic, IronPython, whatever) and the Visual Studio UI designer wizards. It's essentially the same as XNA, which all the Xbox 360 "Indie" games are written in, except with GUI support instead of DirectX hooks. That said, nobody has it installed and that means you're better off using Flash for sites you want a lot of people to see.
Silverlight's also the environment apps are written in for Windows Phone 7 (it also has XNA available for games).
> Another, question though, is what the heck is Adobe Air? yeah, another web player but > why when they already have Flash and Shockwave? - What does it do that they don't?
Air's a layer on top of Flash that tries to make it a complete application platform. It's even clunkier than that sounds like, but RIM (the BlackBerry guys) are pretty much betting the company on it.
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