Microsoft has decided to put support for the H.264 codec and AAC into Silverlight in the future. This is great stuff. In theory this should mean we could get content from places like YouTube and play it directly in Silverlight. And, of course, we who have decided to buy a Mac and use it for video editing and want to publish our newly iMovie edited home videos, we can do it through Silverlight without having to convert to WMV.
Read more about it at Tim Heuers post about it: H.264 and AAC support coming to Silverlight