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XBAP vs Silverlight

XBAP - XAML Browser Application
XBAPs allow you to run Rich Internet Applications that look and function like WPF desktop applications. These XBAPs run inside the Internet Explorer or Mozilla Firefox in a separate sandbox to prevent applications from accessing resources on the local system. A restriction on XBAPs is that they need .NET framework 3.0/3.5 or higher to be installed on the client machine to run.

Silverlight
So if you want your application to be available on the internet and not dependent on the .NET framework, Silverlight is the way to go. Silverlight is a cross platform, cross browser plugin that allows you to run applications defined in XAML inside the browser. Silverlight supports a subset of XAML as of now.

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