By default IIS does not return content that it does not have a mapping for, this will probably effect your first Silverlight deployment.
Before you deploy any Silverlight content you will need to add a mapping in IIS for the .xap extension.
The key is to register a MIME type for .xap for the application/x-silverlight-app type.
Also
Some Silverlight 1.0 applications may use .XAML that is being served directly from the server, so it might be prudent to also add this MIME type:
.xaml for the application/xaml+xml type