A version of
.Net is installed with each version of Windows since one of the XP service packs yes, but if you want to use a more recent version than 1.1, chances are you're going to have to install it on at least some customer machines. Last release was 3.5 SP1 I think, 4.0 is already in beta. To use WPF (and get support for XAML like Silverlight) you've got to at least use 3.0, which I believe is installed on Vista and above, but not XP and lets face it, most apps still need to support XP. Relatedly, I believe that app startup time for Silverlight is also faster than full .Net, but I'm not sure about that one.