There's been some buzz today on the web about WPF/E. Simon asks if Microsoft is screwing it up, while Robert talks about the future of .NET. WPF/E is a tough product. The codename was supposed to imply that it would be WPF everywhere, but when it was released, it was apparent that it was FAR from WPF everywhere. It didn't support .NET code, it doesn't have 3D, it's tough to build real applications, which is what WPF does.
Browser applications are all the rage. I talk a lot about how important desktop Rich Internet Applications are, and the ideal of breaking out of the browser, but there is still a very real need to provide rich applications in the browser. WPF does this with the XPAB deployment model and Adobe Flex 2 is a fantastic technology for building applications in the browser. When WPF/E came out, I think a lot of people thought it would provide that kind of functionality, but it hasn't.
But I think you need to keep an eye on this. They're rolling out very targeted releases. The first CTP was intended to bring windows media to the web to compete with Flash, and it works well. The second version added audio features and and brought the mac support up to par. The further Microsoft gets away from Windows, the more revenue it sacrifices (in theory), so real WPF/E support has always been in doubt. But I think Microsoft is going to surprise us at MIX with what their plans for WPF/E are. Between Expression Studio and Visual Studio, developers and designers will be able to create some great things on WPF and WPF/E.