This post will describe installing Silverlight 3 bits on top of a clean Windows 7 / Visual Studio 2010 environment. I won’t install the Silverlight 2 components, so the resulting environment will be targeted exclusively at Silverlight 3.
At the moment, the Silverlight 3 beta is targeted at Visual Studio 2008 SP1, rather than Visual Studio 2010. (See Tim Heuer’s blog post explaining this). What this means is that we can’t just run the Silverlight 3 Tools installer. If you try, you’ll get the following error.
Note: Also take a look at the official Getting Started page for Silverlight 3.