Rousset created a 4 part write up on explaining a demo built around Silverlight 4, Windows Azure and XNA on Windows Phone 7:
Showing the final result in action as well as the SL4 application to play with
Silverlight 4 XNA Platformer Level Editor for Windows Phone 7: overview (1/4)
The webcam and microphone API was the first thing I played with after the Silverlight 4 beta was released at last year's PDC. In my opinion, it's one of the coolest features. You can do a lot of fun Silverlight applications with it too.
When the SLARToolkit was released, I finally had time to…
Adam Kinney created a fun example squishing bugs to show off Silverlight 4.0's webcam support. He created simple motion detection using a diff
calculation on multiple threads to figure out where his finger was to smooth the bugs! Here is a video showing off the project.