Thanks for your feedback, really appreciated!
.Net 4.0 support will be added to Blend at a later point of time (when .Net 4.0 support is publicly available).
There are very few select features in Blend 3 Preview that don't currently work in WPF because of the current lack of platform support (the only ones I can think of right now are interpolators and projection transform) - our plan is to support Silverlight and WPF uniformly, and innovate on both platforms. Stay tuned for future WPF platform enhancement announcements!
Expression Blend provides for Rapid Application Development exprience with WPF. The fact that Expression Blend (and Expression Design) user interfaces were done in WPF should give you confidence that the platform is ready. But you raise a good question - we def. need some good content and tutorials out there that preaches the best practices and let's you pick up the tool and the platform quickly. Hopefully that will shortly follow - not only from our team but from the broader audience out there.
Some answers to your questions:
a) You can use the language of your choice - C# or VB.Net. Both are equally well supported.
b) You use Visual Studio for coding purposed. Expression Blend has a XAML editor that lets you make quick edits where switching to Visual Studio can be time consuming, but all major coding tasks are better done in Visual Studio for v1 of Blend.
c) Blend supports 2D vectors, images, video, audio, 3D content, etc. So, yes, all the elements required for developing a game are present in WPF and Blend (and we do believe a WPF is a platform suitable for creation of a subset of games). But is unlikely that Halo 3 will be done in Blend .
d) Yes, I hope Channel 9 does a follow up video with more hand-on experience with the tool.