WinForms has given way to WPF and new models such as MVVM, that better enable Test Driven Development, work very nicely with WPF. Also, it seems to me that ASP.NET is very closely aligned with the WinForms way of doing things, for example event handlers in the code-behind which is linked using inheritance or partial classes. With WPF and MVVM, this mechanism falls out of favor and Data Binding is used to further de-couple the user interface to the point where it is just a skin.
So, I would bet that Microsoft is building something like a WPF-inspired, XAML-based replacement for ASP.NET. That is, HTML page views that are written in XAML so that they can take advantage of binding, but when run will render standards-based HTML. However, I can't find any reference online. (There is a ASP.NET MVVM article at CodePlex, but the binding there seems pretty manual.)
This is not intended as a community wiki question, I really do want to know what Microsoft is working on. However, I'm guessing that I can't stop the speculation (I've already done some).
Edit: Quite a few responses pointing to Silverlight have come through. I should have been more explicit. As cool as Silverlight is, I'm really looking for a standards-compatible technology that can be used in LOB applications.