My colleague Larry Olson has posted the
first public demo project for MediaStreamSource. This new Silverlight 2 feature enables file parsers and network protocols to be implemented in managed code inside of Silverlight, thus enabling support beyond the built-in native formats. Since MSS passes off the compressed media samples to the native decoders, it should offer nearly the same performance as a native code implementation (parsers aren't that expensive). But since it runs inside of the Silverlight managed code sandbox, support for new formats and protocols can be just added into player's .XAP package file, and will be completely transparent to the end user.
MediaStreamSource is one of the biggest enabling features in Silverlight 2. At IBC, people came up with all kinds of crazy, awesome, and even useful ideas of what to do with it beyond anything I'd ever imagined. Really, the only big limitation is that you can't use UDP packets, as they're not supported by the Silverlight networking stack.
Some people have had trouble finding the MSDN docs about MSS, so I'll list them here as well:
MediaStreamSource ClassMediaStreamSource Members
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