I'm traveling so I wasn't able to chime in on the availability of a Silverlight release candidate. One of the most important thing for developers is that it sounds like this will be the last round of API tweaks so there will be no more updating your applications. Silverlight.net has some information about what those API changes are. In addition to the API changes, there are some new controls to play with. Silverlight 2 RC includes a progress bar, a password input, and a combo box. The new controls are also included in a new service pack for Blend 2.0. Finally, there are some changes to the skins as well as some changes in how the skins render which will make Silerlight applications look cleaner in some cases.
We keep getting closer. As ScottGu says, it's not that far off, and I've heard rumors to that effect. Microsoft recently had a bunch of independent developers in Redmond to go over the Sivlerlight roadmap, so I expect big things once Microsoft ships Silverlight 2. I think in general most developers are happy with the level of innovation that Adobe and Microsoft have been throwing into their respective projects. Eventually, however, I wouldn't be surprised to see Flash Player and Silverlight diverge a bit. I think they'll always compete at a basic and feature level, but I think it's pretty obvious that the larger strategy of the two companies is different and I think Flash and Silverlight play a core role in those respective strategies. As each runtime becomes more driven by a larger strategy, innovation may start to happen in different areas. I just hope that everyone keeps swapping ideas.