From MSDN:
To run a WPF application, the
Microsoft .NET Framework must be
installed on the client. Internet
Explorer 7 automatically detects
whether clients are installed with
.NET Framework when WPF browser-hosted
applications are browsed. If not
installed, Internet Explorer 7 prompts
users to install it.
To detect whether .NET Framework is
installed, Internet Explorer 7
includes a bootstrapper application
that is registered as the fallback
Multipurpose Internet Mail Extensions
(MIME) handler for content files with
the following extensions: .xaml, .xps,
.xbap, and .application. When these
file types are navigated to, and the
.NET Framework is not installed on the
client, the bootstrapper application
asks for permission to install it. If
permission is not provided, neither
the .NET Framework nor the application
is installed.
If permission is granted, Internet
Explorer 7 downloads and installs the
.NET Framework using the Microsoft
Background Intelligent Transfer
Service (BITS). After successful
installation of the .NET Framework,
the originally requested file is
launched in a new browser window.
.NET Framework auto-detection is
available on Windows Vista, Microsoft
Windows XP Service Pack 2 (SP2), and
Microsoft Windows Server 2003 (SP1)
clients that have Internet Explorer 7
installed.
I think your audience for a WPF browser application might be somewhat limited at this time.