Reid Borsuk, an SDE/T on the CLR security team, has released a fully transparent implementation of the MD5 hash algorithm to the MSDN Code Gallery.  Since the code is entirely transparent, it can be used as part of a Silverlight application that needs to compute MD5 hashes in order to interop with existing code or file formats that requires MD5.

He's also released an MD5Managed type to wrap around his implementation, in case you want to plug the algorithm into the standard .NET hash object model.