Every few month I run into weird installation problems on IIS so that ASP.NET applications (including .svc WCF services and Silverlight applications) don't run with misleading error messages. Today I was running into this problem again. Seems that I hadn't the correct permissions to download a .xap file from the ClientBin silverlight folder. After fiddling around for half an hour or so I eventually remembered to run aspnet_regiis.exe -i to reregister the current .net framework. This solved the problem immediately.
Even if this tool is located in "%windir%\Microsoft.NET\Framework\v2.0.50727" it seems to reregister the newest installed framework (in my case .NET 3.5 and Silverlight).
A similar problem can occur for WCF services with the .svc extension. In this case you need to run ServiceModelReg.exe -i again. This tool is located in "%windir%\Microsoft.NET\Framework\v3.0\Windows Communication Foundation"