Just came back from Tech Ed Eilat, where I attended a session about Silverlight 2.0 by Laurence Moroney, Sr. Tech Evangelist at Microsoft.
Overall it was a nice lecture, at the end there was some Q&A time so I hit Laurence with the big question: What about Silverlight support for iPhone???
What Laurence told me, is that there are some technological issues, mainly because iPhone currently runs on AMR processor. This will also require tight cooperation with Apple's development team.
But tech stuff aside, this firstly has to be solved in the executive level. Does Apple or Microsoft wants to have this? Laurence can tell that Microsoft is indeed interested and that the tow companies are investigating this issue.
To conclude:
The bad news - There might be a technological boundary, Apple's side in the game is unclear.
The good news - Microsoft DOES want to integrate Silverlight into the iPhone.