Bonk - thanks for the (great) questions. The short answer: We've been thinking alot about those specific topics. At the PDC we'll talk about the best paths for existing unmanaged apps and new managed apps, regarding how to take advantage of Longhorn, or
"Light Up" on Longhorn, as we put it. This will be new information (as compared to PDC03). We will not be saying that you need to rewrite everything in managed code, in particular.
Regarding your last question, re: Avalon & Multimedia - I'll ask someone to follow up on this thread with some guidance.