Thanks everyone who commented on my previous post about the layout designer prototype. Hopefully I'll be able to put out the source code in the upcoming weeks. Watch this blog for announcements.
I've been showing http://layout.osenkov.com to people and the feedback is generally positive. Although it's just a concept prototype and is nowhere near close a working XAML designer, it shows off a couple of ideas that I wanted to illustrate.
Nikhil Kothari pointed me to his Silverlight Layout Panels project, which explores similar ideas. He has also found that the standard layout panels are missing certain details such as Spacing between children. Very nice ideas!
Also I was blown away when Dustin Campbell has shown me the DevExpress demos: