It does nothing on my system I won't install it, MS keeps asking me do I want to try it, when I visit the security download part of windows update.
As only something said it is like flash, but intended to be more powerful (but for me flash is a no no, dial-up takes to darn long to load), currently there really is little support for it on sites. However, because of its cross platform support and ability to allow users to use existing programming languages that are supported by .net framework (it comes with a stripped down version of .net), it will most certainly catch on.
When it does and has much wider web site use then it will be a must have it won't just be a shot at taking some of Adobe Flash market share, it could be a flash killer ultimately, as it has much greater functionality than Flash.
http://en.wikipedia.org/wiki/Silverlight