If you get the Fatal Error message during the Silverlight installation with visual studio 2008, this might help you. I was able to solve the problem with these steps.

- Check if you have Visual Studio 2008 SP 1 installed. You can check that opening visual studio, then click help, click About Microsoft Visual Studio

-If you had to install the Visual Studio 2008 SP1, run the Windows Update to get the updates if any. In my case I needed to install 3.

- Uninstall any previous version of the Silverlight

- Download the Silverlight Tools, and install it.

From Webmaster Forum http://www.webcosmoforums.com/asp/20686-fatal-error-silverlight-installation-visual-studio-2008-a.html