A configurable glow effect can be achieved for Silverlight 2 Beta 1 with the use of the Grid control and gradient fills. This will achieve the effect for rectangular and rounded rectangular controls.

The GlowBox control is composed of a Canvas containing a Grid which is used to build the glow and a ContentPresenter.

 The grid contains 8 rectangles with linear or radial gradients. The gradient stop is adjusted to achieve varying degrees of rounding.

A few things that need to be added :

• The gradients need extra stops to allow a smoother alpha tapering.
• The RoundAmount property should be gleaned from the CornerRadius of the content in the GlowBox.
• The properties should be animatable. 

The lastest code for this effect can be found in InnerGlow Post.