I know I am being a bit demanding in the above title but it was an amazing set of demos and announcements.  Worth watching for yourself instead of reading about it.  Here is the link.

The first 30 minutes or so consists of Ray Ozzie followed by a stream of demonstrations and announcements.  Here are my quick notes typing on my phone while watching the keynote in person at MIX:

Internet Explorer 8

Css compliance
Activities
Web slices
Adaptive streaming
-Integration move networks
-Windows Media streaming
-Tco improvements

Silverlight 2

Silverlight advertising template for Visual Studio
Integration with DoubleClick via DoubleClick sdk, available in q2
Expression Blend 2.5 needed for Silverlight 2
Multi language
Ironruby and ironpython
Based on Wpf UI framework
Robust network capabilities
Integrated data support
Shipping controls as source
Shipping test framework and 2000 Unit tests
Can skin controls and control templates without having to write code
Tools to stitch together photos and Silverlight control to put sea dragon on the web integrated into Silverlight 2
Features that exist in Silverlight are api compatible with wpf
Silverlight on mobile announced (Windows Mobile and non-Windows Mobile devices
Apps run on phone without having to change
JavaScript and .NET Silverlight on devices

Expression Studio 2 beta available (improvements in all tools) 

Wpf improvements

More controls
Streamlined installation of .net fx
Adding shader model effects to wpf
Coming in service update in .net 3.5