Why build a converter? XAML doesn't have an <object> tag where you can specify the progid="Shockwave.Flash"? That way you can run the native swf in your xaml app?
Great question, Cybermagellan. Indeed, if you just wanted to play back the Flash file as-is, using the Flash Player is a perfect solution.
However, many companies would like to reuse some of the shape assets in other projects. For example, I can think of many companies who have traditionally used Flash to create quick, conceptual mock-ups of applications they might later build using other tools.
If they then decide to build those applications, it's very convenient for them to be able to take not only the shape data, but also the positioning data from a frame in the mocked-up SWF file. Because WPF is a vector-based system (with full support for bitmaps,
of course), this ends up saving a lot of time and effort.
The example animations I showed in the Channel 9 interview aren't likely candidates for conversion. Those animations play just fine in the Flash Player.