The Silverlight product team has decided to rename Silverlight 1.1 to Silverlight 2.0. Check out these two blogs to find out more detail on this.
http://weblogs.asp.net/scottgu/archive/2007/11/29/net-web-product-roadmap-asp-net-silverlight-iis7.aspx
http://blogs.msdn.com/tims/archive/2007/11/29/silverlight-1-1-is-now-silverlight-2-0.aspx

Also, Microsoft will be releasing a Beta of Silverlight 2.0 in Q1 of 2008.  This Beta will support a Go-Live license that enables developers to begin building and deploying Silverlight 2.0 applications.