I still have a small list of things to get working on wssdemo.com since migrating to the W2K8 Hyper-v platform. Today I managed to tick one off the list.
The SilverlightPart web part would give a 403 error whenever I tried to edit the web part properties. The Sysinternal Process Monitor is a great tool to find out what the w3wp was trying to access under what credentials. Because I have been trying to stick with Installing SharePoint Server 2007 by using the least privilege method (http://technet.microsoft.com/en-us/library/cc298465.aspx ) there is a bit more work in getting some things to work, especially 3rd party solutions.
In this case it was the NTFS security on the ClientBin directory which the web part property panel was trying to 'List folder contents'.
You can see the demo page here http://www.wssdemo.com/pages/silverlight2.aspx
It must be about time for the S+S Blueprint source code to be released (Paul)...