For CE devices, no Silverlight is used. It is just straightforward H264 streams. Protection (DRM) is taken care of in the core hardware platform. Silverlight is primarily required on the PC in order to guarantee that you can't snoop and record the stream inbetween.

Unfortunately, the dual core CPU has got almost nothing to do with the 1080p encode or decode. These are handled by dedicated IPs (pre-designed blocks which are slotted into the chip) from companies like Imagination Technologies and Chips & Media. They would work as well with an single core Cortex-A8 as they do with the Cortex-A9.