I have been pondering the same thing myself. I think Silverlight is great for most of the "regular" user apps, no more chasing users with updates etc so it's nice. But WPF still is needed, for example in business and enterprise where you need to have local access to the PC without the sandboxing of Silverlight.
I got a pretty huge app in winforms which I ponder to rewrite soon, I still haven't decided to go WPF or Silverlight but I'm very much leaning towards Silverlight since it now how rightclick contex menus for example.
Good thing about XAML is that if I go Silverlight and get stuck on something, I can pretty much convert that app to WPF without too much headache.
How much innovation is happening in WPF? how many talks at MIX on WPF? Where does that leave us?