If you ever played with Silverlight you know, that there is no real built-in 3D support (WPF has some 3D features). The phtotosynth team describe there solution on the “About Page”:
Silverlight 2 does not support 3D, so in order to achieve the 3D effects used in this viewer we are utilizing a technique called Affine Texture Mapping where the images are drawn from many triangles, and then we are approximating the texture mapping. If you want to see the triangles we are drawing, press the 't' key and navigate around in the viewer. Hit 't' again to turn off the triangles. :-)
(Look at Wikipedia for more information).
If you press "t" you will see the triangles:
There are some other nice 3D samples with Silverlight 2:
And of course QuakeLight.
I really hope Silverlight 3 comes with some nice 3D features to create some incredible UIs. :)