What do i need to install silverlight? i have Visual studio 2008.Also how can i check whether visual studio 2008 sp1 is installed or not?

1. Open VS 2008.
2. Click Help->About Microsoft Visual Studio menu

You will see something similar to

Microsoft Visual Studio 2008 Version 9.0.xxxx SP.

Also you can see service pack details under the 'Installed Products' panel in the same dialog box.

You can silverlight tools from the following link
Microsoft® Silverlight™ 3 Tools for Visual Studio 2008 SP1

Before installing this tools, make sure that atleast 5 GB free space available in the hard disk drive where your Windows OS installed.

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