This is the first list I've seen that covers the new features being added to WPF in .NET 3.5. Top three things that stand out to me:

1. Binding support for LINQ based data sources
2. UIElement3D - adds support for input and focus events to 3D elements (finally, no more hand crafting!)
3. Viewport2DVisual3D - enables you to paint 3D surfaces with interactive 2D elements. This was a sorely missed feature from 3.0 that appeared as an open source project later and has now been folded into the actual WPF API as a first class citizen.

Ian just put an entry up on his blog called Silverlight Controls and Objects which aims to bring some clarity to the way the Silverlight control hooks into the HTML DOM and exposes its own features. A definite must read for anyone doing Silverlight development.

After having just being bit by the red-ring-of-death a few weeks back myself, I wrote about how annoyed I was that I had to pay $140 to get the thing fixed. Well, according to this press release I should be expecting a nice little refund from MS. Kudos to MS on this move, that's how to keep your customers happy.