Pete Brown has written an interesting C64 emulator that show what Silverlight 3.0 can do. The C64 Emulator he shows during the MIX09 is a generated MediaStreamSource continuously updated by the emulator runtime. This grant a very amazing fluid result. In this article a more detailed explanation.
Link: My MIX09 Silverlight 3 ShowOff Video – Commodore 64 Emulator