You can use Visual Studio 2010 to do Silverlight development (in fact, it'll be the best IDE for Silverlight when it's officially out).
Yes and no. The GUI can be made two fundamental ways: via XAML (XML markup language, can do layouts, animations, data bindings, etc) or via code (programmatically create). Most apps use a mix of both.
There's a lot of ways you can draw the GUI, though. You can use Visual Studio's GUI editor (drag and drop, resize, etc). You can use Microsoft's Expression Blend software (http://www.microsoft.com/expression/products/Blend_Overview.aspx) which is more dedicated to simply doing XAML-based UIs. You can even use stuff like Adobe Illustrator then use a plugin to export it to XAML. There's many ways to do it because that way non-programmers can easily do UI work.
At my company, the UI is designed by a special UX team (the vast majority of which are not at all programmers). They basically control the XAML, usually via Expression Blend & Adobe Illustrator. They lay things out, add transitions, etc modifying only the XAML files. Us programmers then hook up to that with the "code behind" (C#). That way we can take two development tracks and not interfere with eachother. As long as the teams keep using the same named UI objects (so the handles remain), it doesn't matter what the other team is doing.
This way the artists never bother us, and vice versa. Once a night we do a code drop and take their XAML to see what's coming together.
All in all, it's a really slick environment. Extremely productive. It is basically MS taking the best things of Java, Flash, and C++ and wrapping them together with the benefit of hindsight and learning from other peoples' failures.
I think we're getting off-topic here though. There may be a better forum here for this talk.
