From time to time we get asked about Silverlight support for various codecs. The codecs change (today we’re getting some questions regarding WebM/VP8) but our answer is consistent regardless of the individual codec:
We are strongly committed to enabling customer and developer choice with Silverlight and to ensuring that Silverlight provides the highest-quality media experiences possible on the Web.
Silverlight natively supports H.264 as well as VC-1, WMA, MP3, and AAC codecs. Equally important, Silverlight has an extensible Raw AV pipeline—a powerful feature which allows any developer to easily embed other codecs in their applications without requiring any extra installation. Using this feature, many third parties have already enabled 3rd-party codecs for Silverlight including MPEG4.2, ITU-T G.711 alaw/ulaw, Ogg Vorbis, and Ogg Theora that developers can use today.
As standards and customer demand shifts, we will continue to monitor whether any popular codecs require a native implementation. So far, that hasn't been necessary since adding the unique pluggable codec feature in Silverlight.