Silverlight 3 Tools Beta for Visual Studio 2008 SP1 is now available for download.
This installer includes:
XAP Compression Improvements The Silverlight 3 SDK creates XAPs compressed up to 40% better than the Silverlight 2 SDK.
Support for Cached Transparent Platform Extensions Reduce the size of your Silverlight XAP by referencing platform extensions (like DataGrid, Calendar, ScrollView, etc) hosted on Microsoft.com instead of packaging them in your XAP. This property is set on the Silverlight tab of the project properties.
New Project and File Templates When you create a new Silverlight project, there is a new project template called “Silverlight Navigation Template” that will help you get started using the new navigation controls supported by Silverlight 3 like Frame and the new Page and ChildWindow file templates. Be sure to check out Corrina Black's UX blog for new App.xaml files to re-skin this template.
Build Data-Driven RIAs We are simplifying the traditional n-tier application pattern by bringing together the ASP.NET and Silverlight platforms. The RIA Services provide a pattern to write application logic that runs on the mid-tier and controls access to data for queries, changes and custom operations. It also provides end-to-end support for common tasks such as validation, authentication and roles by integrating with Silverlight toolkit components on the client and ASP.NET on the mid-tier. The toolkit components provide a rich set of controls for building LoB RIA applications.
Install the RIA Services CTP after you install Silverlight Tools
Note to Silverlight 2 Developers The Silverlight 3 Tools are for creating Silverlight 3 projects only. You will not be able to release Silverlight 3 projects until Silverlight 3 RTW. To switch your development environment from Silverlight 3 back to Silverlight 2, you will need to uninstall the Silverlight 3 Runtime and Silverlight 3 Tools from Add/Remove Programs and re-install the Silverlight 2 Tools. If you're going to be frequently switching between targets, check out this blog on Switching between Silverlight 3 and Silverlight 2 Tools.
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Silverlight 3 Tools Beta for Visual Studio 2008 SP1 is now available for download . This installer includes
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Juan Rivera from JCX Software and the developer of VS.PHP has added support for Silverlight 3 . 
It would be really beneficial if the DataSourceProvider and related classes were made public for extensibility. We've got an object model that cannot be converted to strongly typed properties or Xml without losing our API's flexibility and functionality.
Extending ObjectDataSource would have been optimal, please consider it! WPF already has this capability, but I'd suggest Silver Light apps need to be able to consume "interesting" entities just as much!
Great work on all the rest though, thanks!