The latest bits were just released for Silverlight 1.0 and 1.1 along with updated previews of Visual Studio 2008 Beta 2, Silverlight Tools for Visual Studio 2008 Beta 2, Expression Blend August Preview, ASP.NET Futures, etc. That's a lot of updates - and a lot of hassle - but definitely well worth the effort.
Of course, with every refresh of bits and update of tools, there's bound to be a few issues. Here are a few links to articles written by some very smart people out there in the "blogoshpere" that I found valuable and in some cases quite helpful:
Are you working with PNG or GIF files in your Silverlight application? Experiencing seemingly unexplainable issues with your Silverlight Image control? If so, read this post by Rob Conery (about 1/2 way down the page) (Note: I had these issues as well and the answer was 'JPEGs')
If you want your 'split views' to display vertically in Visual Studio 2008, Scott Gu has your answer.
Finally, a word about input and hit-testing. If you have a Silverlight element overlaying another element, but you want the element underneath to capture input, what do you do? Jaime Rodriguez writes about the IsHitTestVisible property, which will solve your problems.