I hate to say it, but just 3 days ago I put up a post about PicLens and how Microsoft has been slow to put out new compelling experiences based on certain technologies - and referred specifically to SeaDragon. Well, it turns out that just a few days earlier they had shown the new Deep Zoom technology that comes in Silverlight 2.0. Deep Zoom is based on Sea Dragon.
So there you go. I spoke too soon (and late). It did take a while though.
By putting it out there as part of Silverlight they are taking the usual MS platform route and enabling anyone to build their own experiences on top of it. Unfortunately they have a hard battle ahead of them against Flash and in getting enough end-users to install the runtime to make it compelling for developers (while almost everyone already has Flash installed).