Silverlight is certainly a very interesting technology from Microsoft. It is a browser plugin that allows you to do a lot of 'Flash-like' things on your web pages. It's Microsoft's 'Flash killer'. The technology is impressive and I have to applaud Microsoft for making it available on Firefox and on Safari. This means it works on all the major browsers on both Windows and OS X. It's great to see Microsoft finally acknowledging that Internet Explorer is not the only browser out there and that Windows is not the only operating system out there. That said, I don't see C# scripting of web sites as going anywhere, unless Microsoft makes some very different moves.
The problem with using C# to script a web site is that you need Silverlight installed in order to do it. If Microsoft could convince Mozilla to bundle Silverlight in Firefox (unlikely) and Apple to bundle Silverlight in Safari (again unlikely), I just don't see Silverlight going anywhere. The only way I can see Mozilla or Apple to ever agree to including Silverlight in their browsers by default would be one of two ways.
The first way would be for Microsoft to open source C# and provide a complete open sourced implementation of C# scripting for all the browsers to include. This would need to be either GPL or LGPL licensed. Not another one of Microsoft's pseudo-open source licenses. I could actually see this happening. Microsoft has already submitted and got C# approved as an ECMA standard, so all they would need to do is provide the open sourced implementation of the scripting layer.
The second, and I think much less likely way for Microsoft to get C# web scripting standard would be to open source the entire Silverlight itself. I doubt this will happen though.
Don't get me wrong. I think Silverlight is a very interesting technology and I think C# is an excellent programming language. I just don't see this C# web scripting thing as being practical anytime soon.