Why Silverlight will overtake Flash...
...from a purely distribution/update point of view.
[I'm not an MS lover by the way, I'm just analyzing the market]
Most people have Windows. Most people have automatic updates turned on.
Silverlight 1.0 is currently an optional Software update.
Whats the betting that 2.0 will be rolled into the critical/required updates?
Hence, everyone with Windows, who uses Microsoft Update will then get Silverlight sharpish. Taking over flash in the number of installs and market share.
Plus via Windows Update they'll avoid Flash's current downfall of incompatible versions.
As to the Con's of Expression Studio/Blend, etc.
I use Photoshop and most of the entire Master Suite (including Flash) at work, but I've also use the Expression Studio....and VS2005/08 as well.
It's true that Blend is no match for Photoshop, but neither are the tools in Flash for creating objects/editing.
Compatability between using Blend and VS is a bit of an issue in 1.0 and 1.1 (now upped and renamed to 2.0) - but these are being addressed. For a Beta the integrations quite good after a few little setup fiddles. Just give it time.
Silverlight will, thankfully open up the "flash" market to non "flash purists", i.e. .NET developers....and as .NET is so familiar to existing languages (unlike Action Script), it makes the entire genre more open to development. Which is generally good.
The processing power of using the underlying .NET architecture really does put JS and even Actionscript to shame.
Finally, usability wise (putting on my 'user' hat here) most users don't really care.
They just want it to work and they want it to work 'fast' and 'pretty'. So if Silverlight can do this and compete with Flash, then its just more choice for us (the developers) and very little change for the end users, who probably can't tell the difference between a Silverlight app and Flash app (at the moment).