I'd really rather they didn't -_-. They already have a subset of .Net for the 360 and Windows Phone 7. I understand adding it to Phone 7, because developers are lazy ^_^, but adding it to the 360 seems to bring it closer to a multipurpose device (Sony approach) rather than a single purpose gaming device. Using silverlight for games also seems a little retarded considering MS has XNA to support all three platforms.
I know it's just a bid to try and increase the popularity of silverlight. Even so, I wish they didn't.