H.264 support coming for Silverlight

At the IAB conference in Europe, Microsoft announced that they would be supporting both the H.264 video codec and the AAC audio codec in a future version of Silverlight. Up until now, Microsoft has focused on VC-1 which powers all of Windows media. One of the differentiators of Flash was that the latest release of Flash Player 9 supported H.264 and AAC which are becoming something of a standard in the video industry. Apple heavily relies on H.264 and AAC to power it's rich media offerings.

This is a pretty big deal as it makes Silverlight a possibility for companies that don't want to use Windows Media for whatever reason. And when you combine this with last month's news that Microsoft invested in Move Networks, and it's clear Microsoft is very interested in online video. There's no word on when this version of Silverlight would be available. I suppose there's a chance that it could be released when Silverlight 2 goes out (which should be sometime soon) but more likely this is a Silverlight 3 feature. Update: Josh Catone got confirmation of this.