How do I stream live audio from the location to over the internet using Silverlight 2.0? What equipment, software etc do I need?
It depends what you want to stream. If you just want to stream Mp3s over the web the Silverlight 2 MediaElement will do it for you. Just point the Source property to the Uri of the mp3 and you're done. That same technique works for video, too. If you want to stream live content (i.e. a webcam) then you should use the stream services that were linked to by the other commenter.
I've written/ported a MP3 decoder to Silverlight 3. To get around the issue of a seekable stream and MediaStreamSource, I wrote a custom stream, SeekableStream, that wraps around any other Stream and makes it appear seekable by using an internal memory stream.
You can see it in action here where it can play a MP3 files located locally on your machine or on the web. Source for the library and demo is now up on CodePlex