On November 29 2007, Microsoft Silverlight Team officially announced that Silverlight 1.1 would be renamed to Silverlight 2.0, a jump from a revision to a version. Initially, they had expected several minor upgrades from Silverlight 1.0, but it turned out the opposite. By adding together the Common Language Runtime, Base Class Libraries, Dynamic Language Runtime, the UI Frameworks, DRM, and a shipload of other features, the most appropriate name is definitely Silverlight 2.0.

More details from Tim Sneath's blog post.