WPF/E is Windows Presentation Framework Everywhere. Again nice name Microsoft.
It is a subset of Windows Presentation Framework which will run everywhere. Get it? So this will bring a subset of XAML, CLR and .Net Framework everywhere.
WPF/E will be a small footprint plugin for Firefox, Internet Explorer and Safari (thus will work on Windows and Mac). It will also be available in smart devices, well, Windows Mobile Platform for now. See how a WPF/E app will look in Firefox.

This is a transparent vector clock with animating hands over the page’s background image. The GUI is developed using XAML and code driving the GUI can be written either in C# or VN.Net. XAML will provide a standard control library, vector graphics and layout management. These applets(?) can be controlled by the Javascript and vice versa.
Now this sounds a lot like Flash but hopefully with a better IDE support (Visual Studio). I always knew Microsoft would target browsers with XAML. It is just nice that they are supporting more browsers and platforms than they normally do.
I will not say that this is going to be a Flash killer. But I think this will be a very good way of creating rich applications targeting browsers.
Sources:
Mike Harsh’s Blog
Ajaxian
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