Microsoft kicked off its Mix07 web developers' conference by revealing it has fused a full portable version of its .Net runtime with the next version of its Silverlight 'Flash-killer' technology.

Silverlight, according to keynote speaker and Microsoft chief software architect, Ray Ozzie, becomes a "first-class .Net runtime environment" that can allow multimedia developers to mix their Silverlight apps with .Net - even on non-Windows machines.

"The web has been mostly about DHTML and AJAX," Ozzie said. "But AJAX has limitations...and there are better languages than JavaScript for the sophisticated applications that developers want to build."

Ozzie also said that web and graphic designers and developers will have free use of Microsoft's Windows Live Platform, a web storage service, to store, run and show off their Silverlight applications and videos.

Microsoft also released the alpha of its Silverlight Streaming service, with which developers will be able to store up to 4GB of high-definition video and stream it out to Silverlight users. "With some reasonable limitations, it's on us," Ozzie said.

The beta of Silverlight 1.0, which was known as Windows Presentation Foundation/Everywhere until two weeks ago, was released today. The final version is due sometime this summer, according to Scott Guthrie, general manager of Microsoft's developer division. Silverlight 1.1, which includes the .Net Common Language Runtime (CLR) engine, will arrive sometime after that.

Microsoft also said it is officially shipping Expression Studio 1.0, its suite of multimedia design software that works closely with its popular Visual Studio line of tools, and can be used to build Silverlight applications and videos.

Microsoft also released alpha versions of Silverlight tools for its next version of Visual Studio "Orcas."

It also confirmed rumours that it plans to release some programming tools open source. In particular, Microsoft is releasing something it calls a "dynamic language runtime" (DLR) to allow programmers who prefer to write in recently popular scripting languages such as Python or Ruby to create .Net applications that Silverlight can also run.

The tools will be released on Microsoft's Codeplex open source site.

Adobe said two weeks ago that it would release parts of its Flex rich development tool open source.

Microsoft is making a risky pitch wooing customers who have traditionally been loyal to software from Adobe, Apple, and other firms. But at Mix07, the announcements were well received.

"I can comfortably say that the community respects what we've done," said Ozzie, a software industry veteran best-known for being a co-creator of Lotus Notes. "The community wants a choice."

Silverlight will run on multiple browsers and operating systems, including Mac OS X. Bolstered by .Net, Silverlight will be able to support 37 languages and run 300 to 1,000 times faster inside the web browser than using native Javascript, according to Scott Guthrie, general manager of Microsoft's developer platform.

To bolster his claim, Guthrie showed off a chess application written in Silverlight that pitted one side powered by Javascript against another powered by .Net. Javascript lost.

To demonstrate Silverlight's streaming features, Microsoft trotted out Netflix and web design consultancy Avenue A/Razorfish.

Using Expression, Avenue A/Razorfish built a demo of potential new interactive features to Netflix's Instant Watching streaming video service in three weeks, said Nick Brown, executive vice president of strategy at Avenue A/Razorfish. They include letting users send instant messages to others while watching a movie, inviting them to watch the same movie as you, rate movies or put them in their queue to be mailed to them.

MLB.com showed off a demo of its baseball game streaming service, which allows multi-tasking individuals to watch up to six games at once on small sub-screens, or a single game in high-definition streaming video along with extra statistics and chat functions if they want.

Peter O'Kelly, an analyst with the Burton Group, said that with Monday's announcements, Microsoft's nascent design tools business is finally building to a "crescendo." He also said they clarified what Ozzie has been up to since being hired several years ago to help champion Microsoft's move to a software-plus-services strategy.

"Publicly, Ozzie said, 'This is what I've been working on,'" O'Kelly said.