The main point of this article is to make my reformatted, more debuggable version of Silverlight available to other people for download:

      For 2007-09 v1.0 SDK:  Silverlight_DebugPretty_V10.js 
      For 2007-09 v1.1 SDK:  Silverlight_DebugPretty_V11.js

Background and explanation:
As you probably know, Silverlight.js is a helper file that all Silverlight applications are required to use when starting up.  To make it download faster it has been "minified" into a single line of JavaScript 7000+ characters long.  That's OK for production use, but it makes the source code unusable for debugging.  For debugging you want to be able to use Visual Studio to single step through readable, understandable source code and look at variable values and stack traces.

The 2007-07 version of the Silverlight SDK included such a reformatted Silverlight.js (even including some descriptive comments [gasp!]), but I couldn't find one in the 2007-09 versions of the SDK.  So I made the ones linked to above. 

To do the reformatting ("pretty printing") I started with a free trial copy of the commercial Polystyle code-reformatter product.  That turned the single JavaScript line into about 400 readable lines, with proper indenting.  I followed that with a little hand editing to visually separate the individual methods with lines of asterisks.  One could go even further and add some descriptive comments.

Once you are a old hand at JavaScript and Silverlight you probably won't spend much time looking at Silverlight.js.  But if you are like me, with a background in C# and C++ you may initially find JavaScript's behavior somewhat "odd" and mysterious.  It can be instructive to single step through the startup code in Silverlight.js.  See how one of the first steps is to "instantiate" all the methods of the Silverlight object so they can be called later?

Minification and obfuscation:
I found out via petemounce on the Silverlight Forum (see: http://silverlight.net/forums/t/5697.aspx) that there are tools available specifically for the task of minimizing the size of ("minifying") your JavaScript or HTML.  See: http://www.julienlecomte.net/blog/2007/08/13/introducing-the-yui-compressor/

This is closely related to the task of obfuscation, in which you try to make your code harder to reverse engineer.  Deliberately debugger-unfriendly.  See: http://yuiblog.com/blog/2006/03/06/minification-v-obfuscation/