Visual Web Developer in Visual Studio 2010 has support in box for Silverlight 3 development and includes the Silverlight 3 developer runtime and Silverlight 3 SDK build 3.0.40818.
Silverlight 3 Tools for Visual Studio 2008 and Expression Blend 3 included SDK build 3.0.40624.
Silverlight 3 SDK build 3.0.40818 cannot be installed on machine where build 3.0.40624 is already installed. If you install Visual Studio 2010 on a machine that already has build 3.0.40624 installed, Visual Studio 2010 will indicate that the Silverlight 3 SDK failed to install, however you will still be able to do Silverlight development on Visual Studio 2010 with build 3.0.40624.
Silverlight 3 SDK build 3.0.40818 contains the following updates:
- Remove dependency on .NET 3.5 and allow build when only .NET 4 is installed
- Support for use of non-unicode characters in xap name
- Improvements to refactoring and intellisense
To get build 3.0.40818of the Silverlight 3 SDK, uninstall Silverlight 3 SDK build 3.0.40624 from Add/Remove Programs and then install Silverlight 3 SDK build 3.0.40818 from: http://go2.microsoft.com/fwlink/?LinkID=157102.