If you get this nice error message, you are probably lost, because there is no hints on WHY!!!???
Microsoft Visual Studio
Unable to start debugging. The Silverlight Developer Runtime is not installed. Please install a matching version.
Check your registry!!
When you create a Silverlight project, VS looks for the HKLM,SOFTWARE\Microsoft\Silverlight\Components\Debugging reg key to make sure you have the dev runtime.
And when you debug, Silverlight looks for the HKLM\Software\Microsoft\.NETFramework\DbgpackShimPath reg key.
Thanks Amy!! Check out her blog about Silverlight and web dev
So your registry should have those keys and pointing to
On 64bit machines check
Both these keys should point to the same version (see my examples for Silverlight RTM)