When using this module on your server for the first time, you receive:
Could not download Silverlight application. Check Web server settings.
This is caused by the IIS server not being configured to allow .xap MIME Types. Enable this in IIS to fix your problems.
This is how to configure MIME types in IIS 7.
If you are having problems loading a Silverlight 2.0 application, and you have exhausted all options, you may need to register the XAP file extension in IIS. I banged my head against the wall (well, not really) trying to figure out why my application wasn’t loading. It turns out to be a simple fix. Register the MIME type for .xap to application/x-silverlight-app.
Below are screen shots of where to find MIME type in IIS7.