The list of things to install to get a working Silverlight development environment up and running is a long one. Here's an ordered list to get a Visual Studio 2008 Silverlight 3 environment going.
1) Visual Web Developer 2008
This is your basic development environment. Visual Web Developer is required since Silverlight 3 applications can be hosted in an ASP.NET website.
2) Silverlight Tools for Visual Studio 2008 SP1
These tools will reconfigure Visual Studio to work properly with Silverlight projects.
3) Expression Blend 3 (optional)
This is the only pay-product on the list but is also optional. Expression Blend is used for designing the user-interface of your Silverlight projects. Simple UI work can be done in Visual Studio but for anything moderately complex, you will want Expression Blend. There is a trial version.
4) Silverlight Toolkit (optional)
The Silverlight Toolkit contains extra controls and utilities. It is updated more frequently than the core Silverlight binaries.
5) RIA Services (optional)
RIA services is a framework that tries to make server-client development in Silverlight easier. It comes with a lot of plumbing for server communication, data transfer, and validation. RIA services is in beta as of Sep 2009.
6) Silverlight Contrib (optional)
Silverlight contrib is a collection of extra controls and utilities like the Silverlight Toolkit. It is maintained by the community, not by Microsoft, and is meant to overcome some of the shortcomings in Silverlight with free, open-source code.
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