WPF and Silverlight

Just how do WPF and Silverlight fit together, if indeed at all?

Well, version 1.0 of Silverlight was released a little while, and to be honest left me cold. Support was lacking for LOB applications, and also developing the code behind in c# - therefore no great interest.

Version 2.0 (aka 1.1 until recently) looks a lot more interesting.
It seems that inclusion of form and layout controls is on the list of things to include, not to mention coding the code behind in c#.

The other question for me was whether we can code in xaml and place that code in a windows wpf program, in an intranet xbap and a silverlight web application without any copying and pasting or fiddly little changes, or having to nastily write xslt transforms to achieve this.